Three Asian tech stocks that lead the way in innovation

Professional investor Fay Ren of Cerno Capital highlights three of her favourite Asian tech stocks to buy now

My personal take on the opportunities within Asia is based on companies that can achieve leading positions in either their home markets, or regionally and globally. The Asian consumption story is well known but the new facet is the growth in commercialisation of home-grown intellectual property. The perception of Asian companies as copycats and consumers of Western innovation is now outdated. So a portfolio of Asian shares should extend beyond traditional consumption themes. Asian companies are climbing up the value chain, disrupting Western oligopolies and beginning to lead industry trends.

Taiwan’s leading-edge chipmaker

TSMC (Taipei: 2330) is the world’s leading semiconductor foundry, based in Taiwan. It is one of the very few players capable of producing the leading-edge microchips used in high-performance electronics and is well placed to capitalise on structural demand arising from digitisation, 5G and artificial intelligence. The outlook is positive: revenues are growing at 20% a year and the company will invest US$100bn in producing advanced microchips over the next three years.

The story of the semiconductor fabrication industry is one of consolidation. As the technological challenges and the costs of improving processing power have mounted, even Intel, historically at the forefront, has been struggling. This leaves just two Asian players standing, with TSMC leading in logic chips and Samsung Electronics in memory chips. 

Nidec (Tokyo: 6594) is a Japanese company that manufactures half of the world’s brushless direct current (DC) motors. The company has built its leading position via research and development over 50 years on delivering ever smaller, more powerful motors with superior energy-efficiency. It enjoys scale advantages and breadth in its end-markets, supplying sectors ranging from drones to robots and industrial machinery. It is now leveraging the same skill set into traction motors required for the global electric-vehicle (EV) market. 

Nidec is targeting a 40%-45% share in a market with huge potential as the demand for EVs explodes, with new players entering the market including Apple and Xiaomi. Nidec’s strength as the core supplier of critical components allows it to benefit from the overall growth of the market.

Entertaining Gen Z 

Bilibili (Hong Kong: 9626) is China’s go-to online entertainment platform targeting Generation Z, with over 200 million active users. It is a unique blend of Youtube, Twitch and Netflix, featuring user-generated content, live-streaming, e-sport hosting, and professional video productions. 

It stands out among its countless peers, preserving a distinctive quirky identity thanks to its anime, comic and gaming (ACG) heritage. A community experience is cultivated through innovative interactions, encouraging high user engagement and retention. It also consciously curates an ecosystem supporting quality content and content-makers that will sustain creativity in the long run. 

Businesses are increasingly turning to Bilibili to connect with China’s youth. The platform is expanding at an annual rate of over 70% with multi-faceted revenue streams; key areas include gaming, advertising and e-commerce. 

Recommended

Diesel price ‘scandal’ ‒ how to cut your fuel costs
Personal finance

Diesel price ‘scandal’ ‒ how to cut your fuel costs

With forecourts accused of ripping off motorists, we explain how you can save on fuel
30 Mar 2023
Best easy access savings accounts – March 2023
Savings

Best easy access savings accounts – March 2023

Rising interest rates have boosted the returns on instant-access savings accounts. We look at the top rates available on the market now.
30 Mar 2023
Government confirms delay to increase in state pension age to 68
Pensions

Government confirms delay to increase in state pension age to 68

The increase in state pensions age to age 68 is to be shelved amid concerns over falling life expectancy
30 Mar 2023
The best one-year fixed savings accounts - March 2023
Savings

The best one-year fixed savings accounts - March 2023

Earn over 4% on one-year fixed savings accounts.
30 Mar 2023

Most Popular

The MoneyWeek portfolio of investment trusts – March 2023 update
Investment trust model portfolio

The MoneyWeek portfolio of investment trusts – March 2023 update

A decade ago we set up the MoneyWeek portfolio of investment trusts. It proved a success, says Andrew Van Sickle.
27 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023
11 investment trusts for inflationary times
Investments

11 investment trusts for inflationary times

Inflation eats away at the value of your money, but these investment trusts can help you grow your wealth.
28 Mar 2023