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Growth in Chip Fabricating Businesses as Demand Rises for Chips on the Back of the Smartphone Business: Expert Portfolio Manager Edmund Harriss Discusses Investing in Semiconductor Companies in Asia

67 WALL STREET, New York - June 26, 2013 - The Wall Street Transcript has just published its Investing in Asia 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 Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Investing in Asia - Longer-Term Investing - Asia Pacific Investment Theses - Investing in China - Equity Investing Strategies - China's Domestic Markets - Undervalued Asian Companies

Companies include: International Business Machine (IBM), Taiwan Semiconductor Manufacturing (TSM), Apple Inc. (AAPL) and many more.

In the following excerpt from the Investing in Asia Report, an expert portfolio manager discusses his portfolio-construction strategy and his investment philosophy:

TWST: Are there stocks that you would like to mention?

Mr. Harriss: Certainly within Korea it's a fairly similar story, but Samsung Electronics (005930.KS) remains our top pick, as does Taiwan Semiconductor Manufacturing (TSM) in Taiwan. Again, we're playing quite similar themes. In the consumer area, it is the smartphone business that is generating the most interest and the highest level of sales. Samsung Galaxy is a handset that has performed extremely well. They have taken extra market share away from Apple (AAPL). They also have considerable strength in their memory business, in their TV business and in other consumer durables.

One of the criticisms in the past has been that while Asian companies been very good at manufacturing, they have been less good at developing a consumer brand. In the past, Samsung produced rather lower-end consumer goods. You'd much prefer, as an individual, to go and buy something from Sony (TYO:6758) or Panasonic (TYO:6752). That is no longer the case.

Samsung produces some stylish designs, and they have benefited on the back of that from very high sales and high pricing power, which is brand-based, not simply based on ability to manufacture in scale. And Taiwan Semiconductor is a chip fabricating plant or fabricating business; it is the largest in the world. But they have seen enormous growth, basically for demand for chips on the back of the smartphone business.

If you pick another stock, Hyundai Mobis (012330.KS), a Korean company again, but in the automobile sector. Hyundai has been another successful brand development company. Hyundai came into United States in 1986 selling their first car, which was boxy and pretty unattractive. Hyundai, together with its sister company Kia (000270.KS), have something like 9% of the U.S. automobile market, which as we know, is one of the most sophisticated in the world. And the Hyundai Elantra is now a highly...

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