Conglomerates | Consumer | Financials | Industrials | Natural Resources
Power | Real
Estate | Technology | Telecoms | Transport
Technology
Technology triumphs
Slowing growth in developed markets may be offset by continued appetite at home
This Christmas is likely to be a sober season given the market turmoil of the previous year. Not the best news for technology companies that rely on pre-Christmas sales of televisions, mobile phones and computers to boost profits. And analysts say it won’t just be consumers who are cutting back – businesses are likely to reduce spending too.
Gartner industry analysts forecast last October that the decline in technology spending would span financial services, the public sector, retail and manufacturing. However, they also noted that it is unlikely the sector will totally collapse as technology is embedded in so many aspects of business – for most companies, even the most basic transactions rely on some form of technology.
Gartner spending forecasts are low or down in Europe and the US – which saw the loss of its number two electronics retailer, Circuit City, last November – but at the moment Asia is set to buck the trend with a spending increase of 8.3% forecast for the region, down from an earlier prediction of 11%.
Asia-Pacific has long been respected for the quality of its technology companies and that expertise stretches across the region. Taiwanese, Korean and Indian companies have the biggest representation in the FA100 this year. Fourth on the list, Samsung Electronics is the world’s biggest manufacturer of televisions and mobile phones, and one of Asia’s most successful brands. Last year the company boasted consolidated sales of $105 billion and took the top spot as the biggest mobile phone seller in the US. Anyone that has spent time in Asia will know that the mobile phone is omnipresent whether you are in the Philippines, Indonesia or the huge growth markets of India and China. As long ago as 2005, sales of mobile phones in emerging markets surpassed that in developed markets. This year, roughly two-thirds of sales were in emerging markets, which bodes well given retrenchment in the developed world.
Continued growth of mobile phones sales would also be good news for Samsung competitor LG Electronics. This year LG, whose business spans mobile communications, digital appliances, digital displays and digital media, signed an agreement with Microsoft to develop mobile convergence in an attempt to be at the forefront of mobile computing. It also announced a W220 billion ($152.7 million) investment in solar cell production to power small devices in an effort to capture a large slice of the global solar industry market, which is valued at more than $10 billion dollars.
The host of Taiwanese IT companies that dominate the FA100 list are well-equipped to supply parts for the world’s technology market. Of the 12 tech companies that placed in the list, seven are from Taiwan, top of which is the Taiwan Semiconductor Manufacturing Company (TSMC) at number 13. TSMC is the world’s top contract chipmaker and, while much of the rest of the world was reeling from financial instability, TSMC drove revenues for January to October to NT$289 billion ($8.8 billion), an increase of 13.7% compared to the same period in 2007.
Since its foundation in 1974, Hon Hai Precision has become one of the world’s largest contract electronics and computer manufacturers. More commonly known by its trade name, Foxconn, the company produces components for a who’s who of the technology industry. These include the Mac Mini, iPod and iPhone for Apple Computer; a variety of components for Dell, Intel and Hewlett Packard; the PlayStation 2 and PlayStation 3 for Sony; the Wii for Nintendo; the Xbox 360 for Microsoft; and mobile telephones for Motorola. Listed on the Taiwan Stock Exchange since 1991, last year Hon Hai Precision grew to be China’s largest exporter.
New on the FA100 is High Tech Computer, the world’s premier producer of smart phones operating on Windows software. Better known by its brand name HTC, it has built its business by partnering with mobile operators and investing heavily in research and development, which forms 25% of headcount. Last year it made the news by developing the first intuitive touch screen that enables finger tip control.
Also new on the list this year is India’s Wipro, which joins Tata Consultancy Services, one of the country’s oldest and largest technology companies. Wipro is the world’s biggest independent research and development services provider, and runs more than 50 service centres across the globe. Its inclusion in the list is testament to the importance and success of Indian technology companies. Meanwhile, Tata Consultancy Services (part of the Tata industrial conglomerate) developed its IT services, business solutions and outsourcing business by buying Citigroup Global Services and saw its international business grew 9.5% as a result. Significant outsourcing wins led to expansion in the UK and Europe while growth across new markets such as Asia-Pacific, the Middle East and Africa helped compensate for softer progress in developed markets.
| Ranking by revenue |
| Country |
Company |
|
| TW |
AU Optronics |
520.4% |
| SK |
LG Electronics |
474.7% |
| TW |
MediaTek |
48.8% |
| TW |
Asustek Computer |
44.0% |
| IN |
Wipro |
43.7% |
| IN |
Tata Consultancy Services |
42.1% |
| TW |
Hon Hai Precision |
29.8% |
| TW |
High Tech Computer |
14.6% |
| SK |
Samsung Electronics |
-6.3% |
| TW |
Taiwan Semiconductor Mftg Co |
-12.5% |
| TW |
United Microelectronics Corp |
-48.0% |
| SK |
Hynix Semiconductor |
-83.2% |
| |
|
|
| Ranking by revenue growth |
| Country |
Company |
|
| TW |
AU Optronics |
63.8% |
| TW |
MediaTek |
52.4% |
| IN |
Wipro |
40.8% |
| IN |
Tata Consultancy Services |
40.7% |
| TW |
Asustek Computer |
34.8% |
| TW |
Hon Hai Precision |
29.0% |
| TW |
High Tech Computer |
12.2% |
| SK |
Hynix Semiconductor |
11.8% |
| SK |
Samsung Electronics |
7.1% |
| TW |
United Microelectronics Corp |
2.6% |
| TW |
Taiwan Semiconductor Mftg Co |
1.6% |
| SK |
LG Electronics |
1.4% |
| |
|
|
| Ranking by net profit |
| Country |
Company |
|
| TW |
AU Optronics |
520.4% |
| SK |
LG Electronics |
474.7% |
| TW |
MediaTek |
48.8% |
| TW |
Asustek Computer |
44.0% |
| IN |
Wipro |
43.7% |
| IN |
Tata Consultancy Services |
42.1% |
| TW |
Hon Hai Precision |
29.8% |
| TW |
High Tech Computer |
14.6% |
| SK |
Samsung Electronics |
-6.3% |
| TW |
Taiwan Semiconductor Mftg Co |
-12.5% |
| TW |
United Microelectronics Corp |
-48.0% |
| SK |
Hynix Semiconductor |
-83.2% |
| |
| Ranking by ROE |
| Country |
Company |
|
| TW |
High Tech Computer |
58.5% |
| IN |
Tata Consultancy Services |
56.0% |
| TW |
MediaTek |
43.7% |
| IN |
Wipro |
32.3% |
| TW |
Hon Hai Precision |
23.2% |
| TW |
Taiwan Semiconductor Mftg Co |
22.0% |
| TW |
AU Optronics |
21.2% |
| SK |
LG Electronics |
18.8% |
| TW |
Asustek Computer |
18.8% |
| SK |
Samsung Electronics |
15.4% |
| TW |
United Microelectronics Corp |
6.4% |
| SK |
Hynix Semiconductor |
3.8% |
| |
|
|
| Share price |
| Country |
Company |
Share price, Nov 1, 2007 |
Share price, Nov 1, 2008 |
Currency |
| TW |
Asustek Computer |
101.8 |
47.6 |
TWD |
| TW |
AU Optronics |
64.4 |
22.8 |
TWD |
| TW |
High Tech Computer |
508.5 |
393.5 |
TWD |
| TW |
Hon Hai Precision |
207.8 |
80.0 |
TWD |
| SK |
Hynix Semiconductor |
24,550.0 |
10,800.0 |
KRW |
| SK |
LG Electronics |
91,800.0 |
94,500.0 |
KRW |
| TW |
MediaTek |
630.7 |
296.0 |
TWD |
| SK |
Samsung Electronics |
549,000.0 |
535,000.0 |
KRW |
| TW |
Taiwan Semiconductor Mftg Co |
63.9 |
48.0 |
TWD |
| IN |
Tata Consultancy Services |
1,020.4 |
537.5 |
INR |
| TW |
United Microelectronics Corp |
19.5 |
9.2 |
TWD |
| IN |
Wipro |
499.4 |
272.2 |
INR |
