Shares of heat-dissipation parts makers have generally outperformed the market this year, as investors are positive about their business outlook next year and believe that market demand will increase further as 5G adoption takes off.
Thermal modules are crucial, as they help dissipate heat and ensure normal performance of computers, smartphones, servers and vehicles, analysts said.
Good heat-dissipation systems, such as heat pipes and vapor chambers, have become increasingly crucial as electronic devices continually become lighter and slimmer, they said.
This year, Chaun-Choung Technology Corp (超眾) saw its shares surge 40.39 percent on the Taiwan Stock Exchange as the broader market slid 8.6 percent, while Auras Technology Co Ltd (雙鴻) rose 34.11 percent on the over-the-counter Taipei Exchange, where the benchmark TPEX retreated by 16.82 percent.
Over the same period, Jentech Precision Industrial Co (健策), Forcecon Technology Co (力致) and Taisol Electronics Co (泰碩) rose 17.24 percent, 11.92 percent and 7.53 percent respectively.
The sector has seen greater competition since last year, with the gross margins at most firms sliding, but Chaun-Choung stands out among its peers with vapor chamber products that have been adopted in high-end computers, gaming notebooks, flagship mobile phones and gaming handsets, Yuanta Securities Investment Consulting Co (元大投顧) said.
“Vapor chambers will be the company’s main growth driver,” Yuanta analyst Calvin Wei (魏建發) said in a research note on Thursday last week.
“With 5G construction to begin next year, vapor chambers should see even greater demand,” Wei said.
The company’s alliance with Japan’s Nidec Corp would help it focus on niche and high-priced product development to avoid price competition, Wei said.
The government-funded Industry, Science and Technology International Strategy Center (產科國際所) said next year would mark the beginning of the 5G era, with South Korea and the US taking the lead by launching commercial services based on 5G technology, which offer high-speed transmission and low data transmission latency compared with 4G.
As for consumer services, shipments of 5G handsets are likely to commence next year in small volumes and account for less than 1 percent of global handset shipments, Yuanta said.
Shipments would accelerate gradually in 2021 and 5G phones could account for 65 percent of total handset shipments in 2026, creating higher demand for heat-dissipation designs, due to the larger power consumption of 5G handsets, it said.
There are still no reliable statistics on the power consumption of 5G handsets, Wei said.
However, based on tests conducted by Huawei Technologies Co (華為), which is to launch the first 5G handset by the middle of next year, 5G smartphones could on average consume 10 watts to 15 watts, compared with less than 5 watts for 4G handsets, menaing that heat pipes or vapor chambers would increasingly need to replace graphite sheets, he said.
Demand for heat-dissipation parts would also be boosted by the need for 5G base stations, switches and servers, benefitting local players such as Chaun-Choung, Auras and Taisol, as well as Asia Vital Components Co (奇鋐) and Sunonwealth Electric Machine Industry Co (建準), he said.
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
Luxury fashion powerhouse Prada SpA has acknowledged the ancient Indian roots of its new sandal design after the debut of the open-toe footwear sparked a furor among Indian artisans and politicians thousands of miles from the catwalk in Italy. Images from Prada’s fashion show in Milan last weekend showed models wearing leather sandals with a braided design that resembled handmade Kolhapuri slippers with designs dating back to the 12th century. A wave of criticism in the media and from lawmakers followed over the Italian brand’s lack of public acknowledgement of the Indian sandal design, which is named after a city in the
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached