He holds Taiwan Semiconductor Manufacturing Co (TSMC,
A Salomon Smith Barney ana-lyst's assigned range of coverage may help explain the diverging views.
Han Ong, who has headed up Asia-Pacific equity strategy at Salomon Smith Barney Hong Kong Ltd since January 2000, recalls "many times" when he's disagreed with a country head of research on stock strategy.
"I'm looking at Asia from a global basis while analysts look at a market from a stock basis," he said.
Ong's view, which is similar to Paterson's, is in the skeptic's corner. While the US economy may grow in 2002, business spending on things such as computers will remain depressed, crimping growth prospects in the world's biggest economy, he said.
"Demand for technology is not going to be there as early as or as strongly as have been built in share prices," Ong said.
Merrill Lynch & Co and Morgan Stanley Dean Witter & Co agree with Hanson. They expect a growing US economy to boost demand for Taiwan's exports and forecast the TAIEX may climb as much as 17 percent to 7,000 this year.
Last month, a poll by the Federal Reserve Bank of Philadelphia showed that 31 economists expect the US to recover by the middle of the year, with gross domestic product increasing at a 1.5 percent annual rate in the first six months.
With Taiwan interest rates at a record low after 12 reductions in 13 months, people are investing in stocks rather than parking them in bank deposits or bonds. To boot, Taiwan's stocks are cheap. Hanson reckons they trade at about 2.6 times book value, compared to a high of 4.8 times between 1996 to 2000.
Hanson said the TAIEX will rise to 7,504 this year.
Hanson recommends investors buy the two biggest made-to-order chipmakers, TSMC and United Microelectronics Corp (UMC,
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