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AI Revolution Boosts Taiwan’s Stock Market to New Heights in 2023
SPOTLIGHT

AI Revolution Boosts Taiwan’s Stock Market to New Heights in 2023

Taiwan
t 2330.TW m 2454.TW q 2382.TW w 6669.TW w 3231.TW l 2301.TW i 2356.TW g 2376.TW
Blue Chip 150
Tech 350
Semicon 75
Mid and Small Cap 2000
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Taiwan's stock market is experiencing a significant boom in 2023, driven largely by the rapid expansion of AI-related stocks. Behind this remarkable growth are consumer-oriented AI innovations and Taiwan's leading role in the semiconductor industry, highlighting the country's pivotal position in the evolving landscape of global technology.

In 2023, Taiwan’s stock market has seen a significant surge, particularly in AI-related stocks, with the TAIEX index reaching its highest point since April 2022. This growth is largely driven by the burgeoning AI sector, reflecting increasing investor interest in its potential.

The AI market, driven by consumer-oriented generative AI programs such as OpenAI’s ChatGPT and Google’s Bard, is poised for exponential growth. Bloomberg Intelligence projects that generative AI will expand its impact from less than 1% to 10% by 2032, across diverse sectors including IT hardware, software services, advertising spending, and gaming market spending. This growth trajectory encompasses various facets of the hardware sector, with specific revenue projections for AI servers ($132 billion), AI storage ($93 billion), computer vision AI products ($61 billion), and conversational AI devices ($108 billion), all heavily reliant on AI chips.

The global AI chip market, valued at $17 billion in 2022, is projected to soar to approximately $227 billion by 2032. This represents a remarkable compound annual growth rate (CAGR) of 29.72%, underscoring the accelerating demand within the AI chip sector.

AI Revolution Boosts Taiwan’s Stock Market to New Heights in 2023: image 1
Source: Precedence Research.

Taiwan, home to some of the world’s premier semiconductor and technology companies, plays a pivotal role in the global tech supply chain and well-positioned to capitalize on the AI boom. At the forefront is Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest independent manufacturer of semiconductor chips. TSMC’s expertise in fabricating chips, which power leading-edge technologies for prominent clients such as Nvidia, positions it as a vital contributor to the advancement of generative AI.

This report, however, shines a spotlight on other key players in Taiwan’s AI sector:

Company NameBrief DescriptionMarket Cap,
$ mn
JAKOTA Indices Presence
MediaTekAI-powered chipsets for mobile device47,786.0Blue Chip 150, Semicon 75, Tech 350
Quanta ComputerAI servers25,610.8Blue Chip 150
WiwynnAI servers10,168.4M&S Cap 2000, Tech 350
WistronAI servers8,836.4M&S Cap 2000
Lite-On TechnologyPower management solutions for AI applications7,863.5M&S Cap 2000
InventecAI servers4,841.6M&S Cap 2000
Giga-Byte TechnologyGraphics card for AI applications4,730.2M&S Cap 2000

These stocks have significantly outperformed the TAIEX index in 2023. Despite a peak in June-July, four of these companies have seen their share values increase by over 100% year-to-date. In August, there was a slowdown, with foreign investors transitioning to net sellers amid a cooling AI market.

AI Revolution Boosts Taiwan’s Stock Market to New Heights in 2023: image 2

Financially, MediaTek stands out with the highest EBITDA and EBITDA margin, despite experiencing the most substantial decline in total revenues over the past year.

Company NameLTM Total RevenueLTM Total Revenues, One Year Growth %LTM EBITDAEBITDA margin, %LTM EPS
MediaTek13,131.9-27.6%2,596.119.8%1.4
Quanta Computer35,813.3-13.1%1,635.44.6%0.31
Wiwynn8,629.43.2%550.96.4%2.26
Wistron28,692.5-8.5%1,218.54.2%0.13
Lite-On Technology4,924.1-11.7%579.511.8%0.21
Inventec16,616.7-6.1%302.51.8%0.05
Giga-Byte Technology3,791.58.2%153.14.0%0.23

In terms of the EV/Sales ratio, MediaTek is the leader. Giga-Byte Technology, the smallest in market capitalization, excels in EV/EBITDA and P/EPS metrics.

Company NameTEV/Total Revenues LTMTEV/EBITDA LTMP/EPS LTM
MediaTek3.5x17.3x21.5x
Quanta Computer0.7x15.1x21.1x
Wiwynn1.2x18.0x25.7x
Wistron0.4x9.5x23.1x
Lite-On Technology1.2x10.1x16.6x
Inventec0.3x17.0x27.5x
Giga-Byte Technology1.1x25.8x31.7x
MEAN1.2x16.1x23.9x
MEDIAN1.1x17.0x23.1x

Established in 1986, Giga-Byte Technology primarily focuses on motherboards. However, the company is also a well-recognized brand for graphic cards utilized in AI applications and actively manufactures AI training and inference servers. Following a 12% sales downturn in 2022, Giga-Byte Technology has experienced a significant rebound, projecting a return to double-digit growth. By the end of 2023, the company is expected to achieve sales totaling 132 billion TWD, marking a substantial 23.5% increase compared to the previous year.

Giga-Byte Technology: Key financial indicators, TWD million

For the Fiscal Period Ending12 months
Dec-31-2020A
12 months
Dec-31-2021A
12 months
Dec-31-2022A
LTM
12 months
Sep-30-2023A
12 months
Dec-31-2023E
Total Revenue84,602.8121,905.4107,263.6118,976.8132,442.7
  Growth Over Prior Year36.9%44.1%(12.0%)8.2%23.47%
Gross Profit14,464.429,590.016,616.114,144.7
  Margin %17.1%24.3%15.5%11.9%12.82%
EBITDA4,817.515,059.46,465.14,805.26,333.14
  Margin %5.7%12.4%6.0%4.0%4.78%
EBIT4,217.814,486.55,845.24,116.85,458.79
  Margin %5.0%11.9%5.4%3.5%4.12%
Earnings from Cont. Ops.4,331.213,335.16,534.84,710.9
  Margin %5.1%10.9%6.1%4.0%
Net Income4,374.313,338.06,538.54,713.74,893.0
  Margin %5.2%10.9%6.1%4.0%3.69%
Diluted EPS Excl. Extra Items6.7920.610.127.377.7
  Growth Over Prior Year124.8%203.4%(50.9%)(46.8%)(25.18%)

The surge in AI-related stocks on the Taiwan stock market is a testament to the nation’s capacity for adaptation, innovation, and success in the ever-changing global economic scene. Taiwan distinguishes itself not only as a manufacturing stronghold but also as a driving force in the next generation of technological advancements, particularly in artificial intelligence. This trend is exemplified by companies like Ever Fortune.AI (TPEX:6841), which is revolutionizing the healthcare industry with advanced digital solutions. Leveraging the latest in artificial intelligence and big data analysis, Ever Fortune.AI is committed to improving patient outcomes. With a market capitalization of approximately $200 million and not yet part of the JAKOTA indices, the company’s rapid growth in the expanding AI sector suggests its inclusion could be on the horizon.

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