Asian Technology Stocks Poised for a Boom in Q4, Analysts Say

Asian technology companies are waiting for new products to boost demand, which is expected to come from Microsoft's Windows Vista operating system, Nintendo's Wii video-game console, and Sony's PlayStation 3. The fourth quarter has historically been the best time for Asian technology stocks, with an average gain of 10 percent since 1996. Last year, the industry index climbed 17 percent for the biggest jump among 10 groups.

Key Takeaways:

• The fourth quarter has been the best time to own Asian technology stocks during the past decade, with an average gain of 10 percent since 1996.
• New products such as Microsoft's Windows Vista, Nintendo's Wii, and Sony's PlayStation 3 are expected to boost demand for Asian technology companies.
• Quanta Computer, the world's biggest producer of notebook computers, may benefit from the introduction of Windows Vista.
• NEC Electronics, a supplier of semiconductors for Nintendo's Wii, and Toshiba, a maker of chips for Sony's PlayStation 3, stand to profit from the new products.
• Best Buy, the largest U.S. electronics chain, made 35 percent of last year's sales in the fourth quarter, indicating peak holiday demand.
• Analysts expect business customers to adopt Vista faster than any previous operating system, leading to a third of the world's PCs being upgraded.
• Companies like Samsung Electronics, the world's largest maker of memory chips, and Delta Electronics, the world's biggest maker of power supplies for PCs, are also expected to benefit from the new products.

Statistics:

• Since 1996, the average gain for Asian technology companies in the fourth quarter is 10 percent.
• Last year, the industry index climbed 17 percent for the biggest jump among 10 groups.
• Worldwide sales of semiconductors climbed 2.1 percent in August to a record $20.5 billion.
• Shares of Nintendo have risen 1.3 percent since the company raised its full-year profit forecast by 20 percent.
• Shares of NEC Electronics have gained 1.8 percent since its Aug. 23 forecast that operating margin would increase tenfold within three years.
• Shares of Toshiba have risen 0.4 percent this year.
• August sales of Delta Electronics jumped 32 percent from a year earlier to a record.

Sources:

• Reuters article "Asian tech stocks poised for big holiday boost" (no date)
• The International Monetary Fund Web site (www.imf.org)
• Microsoft's general manager of Windows product management, Brad Goldberg
• Quanta Computer, Taiwan's biggest personal computer maker, and Acer, Taiwan's second-biggest personal computer maker
• Taiwan Semiconductor Industry Association (no date)
• Reuters article "Microsoft to sell Vista to companies next month, households in January" (no date)
• Citigroup in Hong Kong
• Atlas Investment Management in Hong Kong
• Japan's third-biggest semiconductor maker, NEC Electronics
• Japan's largest chipmaker, Toshiba
• Taiwan's biggest maker of power supplies for PCs and game consoles, Delta Electronics