Taiwan's Booming Semiconductor Business

Robert Hsu, March 30, 2009

What industries are showing strength so far this year? The answer may surprise you.

Many technology companies have actually held up better than other global sectors in 2009. That's because there continues to be a fast growing demand for electronics, and in turn, the electronic chips inside these devices.

The one country in the world that is dominating the manufacturing of semiconductor wafers in recent years is Taiwan. That's because Taiwan uses foundries to manufacture these wafers, and since many companies use foundries (setting up semiconductor manufacturing facilities is expensive and their life span is short), business is booming in Taiwan.

That's why I recently recommended the Taiwan's top company in this industry to my Asia Edge subscribers. It is the most profitable company in Taiwan and the dominant leader in the semiconductor foundry industry.

This company specifically manufactures premium logic chips (which process data) instead of commodities like memory chips (which merely store data) or central processing units (CPUs). And the company makes money by manufacturing an extraordinarily high volume of chips at cheap prices. The more chips the company makes, the lower the cost per chip and the higher the profit.

Over the years, this company has become the ultimate arms dealer in the semiconductor industry, supplying products for clients who are often in competition with each other, including Intel, Texas Instruments, Nvidia, and Qualcomm.

It's a world-class company that's well-known for its exports to all over the world, and it's one of the few companies that can operate on 30% profit margins. As a result, this company has posted seven straight years of top-line growth. In 2008, net sales rose 3.3%, and the company expects gross profit to account for 14% to 16% of revenue in 2009.

This company's wide and increasing lead over competitors through superior technology, more efficient manufacturing processes, and strong partnerships with its customers have made it resilient during the global financial crisis. And that's why it's a great buy at this time -- I'm expecting a double-digit gain in the next six months.

To learn how you can profit from this semiconductor manufacturer, join Asia Edge today!

Sponsored Links

What's happening in the world's major foreign markets right now? Will current events affect the stocks in your portfolio? Read InvestorPlace Asia's Top Stories to find out everything you need to know in order to stay on top of global economic news.

more...

Every country has its own special customs and traditions. Being familiar with a country's culture can often make a difference in whether you gain or lose from investing in its stock market. Check out our culture section to learn more about the societies of the world's fastest-growing emerging economies.

more...

There's a lot happening around the world today, and it's important to know how it's affecting your investments. Watch the latest videos covering important Asia topics!

more...