Despite a sluggish global economy, some improvements have been seen in the global electronics industry, which bodes well for Taiwan, given its heavy reliance on electronics exports, Barclays said in a report.
There are signs that summer sales, particularly for mobile devices, will be especially brisk, Leong Wai Ho (梁偉豪), a senior regional economist with the British banking group, said in the report.
The smartphone boom is in its early stages, he said, citing Ericsson, which expects smartphone subscriptions to increase from 1.2 billion last year to 4.5 billion by 2018, as network speeds improve with the development of long-term evolution (LTE) technology, a standard for wireless communication of high-speed data.
With major global smartphone brands set to launch products over the coming months, the effects have “cascaded down the supply chain to manufacturers of components and semiconductor memory chips,” Leong said.
Tight supply has already prompted Asian memory chipmakers to buy chips on the open market, pushing up the spot price per chip to US$1.83 as of Monday last week, from US$1.07 in January, Leong said.
Asian chipmakers are also investing in capital equipment, pushing the book-to-bill ratios of US semiconductor equipment firms above the levels seen since January, he added.
Taiwan and South Korea, whose electronics exports play an important role in their economies, will benefit from this situation, Barclays said.
Semiconductor shipments accounted for more than 20 percent of exports in Taiwan and 8 percent in South Korea, the report said.
Taiwanese and South Korean assets are likely to benefit from the combination of a moderate pickup in global growth, the strengthening of the electronics cycle and continued monetary support in a low-inflation environment, the report said.