HSBC Holdings PLC’s global private banking and wealth management division has an upbeat outlook for Taiwan, the only North Asian market for which it had raised its outlook, as the domestic semiconductor sector is expected to continue to benefit from digitalization worldwide, it said yesterday.
Although the semiconductor sector has posted robust profit growth this year, it is likely to expand further next year thanks to a rising demand for chips, Hong Kong-based chief investment officer for Asia Fan Cheuk Wan (范卓雲) told a news conference.
Next year, semiconductor companies’ earnings per share are likely to grow at a slower pace, due to this year’s high comparison base, but would not lose steam, as more non-tech industries are digitalizing and new applications would be developed for the “metaverse,” a virtual universe facilitated by virtual reality technology, Fan said.
Photo: Lee Ching-hui, Taipei Times
“Some companies raised prices for their advanced process technology or products this year, and the effect on profits might become more evident next year,” chief investment officer for North Asia Patrick Ho (何偉華) said.
In Asia, HSBC has also raised its outlook for Singapore, Thailand and Indonesia, as their economies are expected to benefit from high rates of vaccination against COVID-19, Fan said.
On Tuesday, PGIM Securities Investment Trust Enterprise Co (PGIM, 保德信投信) forecast that the combined profits of local companies next year would grow at a single-digit percentage rate next year, after advancing 70 percent annually to NT$4 trillion (US$143.86 billion) this year.
Photo: Chang Hui-wen, Taipei Times
Profit momentum this year can mainly be attributed to gains in the electronics, shipping and conventional industries, PGIM fund manager Bevan Yeh (葉獻文) told a news conference in Taipei.
Next year, the electronics sector is likely to see a 10 percent rise in profits, but conventional industries are expected to be affected by the rising cost of raw materials as inflation surges worldwide, Yeh said.
It is difficult to predict when freight rates might return to normal levels in the shipping sector, as congestion at seaports worldwide has persisted longer than expected, Yeh added.
“As for the metaverse, we think that it is more like a slogan, as no firm has so far really benefited from new business related to the concept. But it is worth paying attention to how the industry will develop based on the concept,” Yeh said.
Taiwan Semiconductor Manufacturing Co (台積電) is expected to have a rosier second half of next year than the first, as the company has to negotiate with governments worldwide about setting up new factories, Yeh added.
Local stocks next year are likely to experience a “smile curve”: starting high in the first quarter, falling in the second and third quarters, and recovering in the fourth quarter, he said.
The net selling of local shares by foreign institutional investors might continue next year, as it has happened for two consecutive years, he said.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
RSS