SoC Integration for Mobile Devices Becomes Key Growth Driver for Semiconductor Industry: A Wall Street Transcript Interview with Mark Li, Senior Research Analyst Covering the Asian Semiconductor Sector for Sanford C. Bernstein & Co.

Wall Street Transcript

67 WALL STREET, New York - October 1, 2013 - The Wall Street Transcript has just published its Semiconductors Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Mobile Device Consumer Demand - Enterprise Data Storage Demand - Energy Efficiency, Cloud Computing and Telecommunications

Companies include: Taiwan Semiconductor Manufactu (TSM), Semiconductor Manufacturing In (SMI), Intel Corporation (INTC), Apple Inc. (AAPL), United Microelectronics Corpor (UMC), QUALCOMM Inc. (QCOM), Advanced Semiconductor Enginee (ASX) and many others.

In the following excerpt from the Semiconductors Report, award winning expert analyst Mark Li discusses the outlook for the sector for investors:

TWST: You expect the Chinese fabless industry to outgrow the overall semiconductor sector. Which companies are in the best position to capture that growth, and why?

Mr. Li: For suppliers that provide manufacturing service to these companies, I think two companies will be the key beneficiaries. One is TSMC (TSM). The second one is SMIC (SMI). TSMC is well-positioned because now they are indeed the share leader in that space. They have very good technologies, a well-recognized brand for quality, reliability as well. And the second beneficiary will be SMIC. They have number-two share in this market. It's also a pure-blood Chinese foundry with equity investments from Chinese government, so oftentimes it's the preferred supplier in the eyes of Chinese government or Chinese companies. They are also cheaper compared to TSMC, and finally, they have been improving their execution and quality in the past one to two years. So now their quality, delivery has been pretty solid, enough to satisfy the needs of Chinese companies without issue.

TWST: You expect risk to intensify in the foundry sector over the next few years. What factors will lead to increased risk, and which companies do you think are best prepared to withstand increased risk?

Mr. Li: There are, I think, three risks that foundry will be facing going forward. The first one is cost increase at a very fast rate, and that's going to pressure everyone, basically everyone who wants to do newer technology. They all have to spend high R&D expense or capex investment in new technology or capacity and will need to face that cost challenge.

The second factor is upcoming competition from Intel (INTC). You can see right now, in terms of end application, smartphones are getting bigger and PC demands are weakening...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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