Taiwanese semiconductor companies are expected to benefit from increasing demand for 5G network development worldwide as well as the US-China trade dispute, analysts said yesterday.
As countries around the world are speeding up 5G network development, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is boosting production of its 5-nanometer chips to meet demand, particularly from makers of 5G wireless devices, analysts said.
TSMC has said that capital expenditure this year would be greater than its original estimate of US$10 billion to US$11 billion, they said.
MediaTek Inc (聯發科) also expressed optimism over the 5G market, as global sales of 5G smartphones could reach 140 million units next year, they said.
With the expected higher demand, MediaTek’s 5G chipset shipments are likely to reach 22 million units next year and 87 million units in 2021, analysts said.
The IC designer is also expected to receive orders from Huawei Technologies Co (華為) to supply 5G chips in the first quarter of next year, with the new business expected to serve as a driver of shipments for the Hsinchu-based firm, Chinese-language media reports have said.
Taiwanese firms are also expected to benefit from the US-China trade dispute, as many Chinese companies have been looking elsewhere for manufacturing, including Taiwan.
Taipei-based radio frequency IC supplier RichWave Technology Corp (立積) is expected to see a 20 percent quarterly increase in revenue this quarter, analysts said.
A survey released on Saturday of the investment strategies of major securities houses in Taiwan showed that their top picks for this month are companies devoted to developing 5G technology, followed by Apple Inc-concept stocks and auto stocks.
President Capital Management Corp (統一投顧) chairman Park Li (黎方國) said that while trade tensions between the US and China have sent ripples through global financial markets, investors had better take a close look at niche stocks, including 5G-related stocks.
Taiwanese suppliers to Huawei, which has been gearing up to grasp a large share of the 5G market, might be a good bet, Li said.
Hopefully, the launch of next-generation iPhones will allow Apple suppliers in Taiwan to enjoy growing sales momentum for the rest of this year, he said.
Apple has announced an event on Tuesday next week, at which it is expected to release new iPhone models.
Among the major suppliers in Taiwan for iPhones are assembler Hon Hai Precision Industry Co (鴻海精密) and camera lens maker Largan Precision Co (大立光). Apple accounts for more than 40 percent of their sales each year, according to market estimates.
Capital Investment Trust Corp (群益投信) fund manager Ryan Shen (沈萬鈞) said he also favored stocks related to the development of electric vehicles as environmental awareness rises.
Companies that focus on artificial intelligence and the Internet of Things are also favorable, Shen said.
The TAIEX fell 205.76 points, or 1.90 percent, last month as the US and China increased trade tariffs on each other’s goods. On Friday, it closed at 10,618.05 points.
A potential interest rate cut by the US Federal Reserve this month, the debut of new iPhones and a back-to-school buying spree could lend support to the local main board, Li said, adding that the TAIEX should move between 10,460 and 10,920 points this month.
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