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Wednesday February 22, 2012
Asia tech turnarounds: TSM and LPL
by Yiannis Mostrous, editor Passport to Profits. Taiwan Semiconductor (TSM) is undervalued and offers solid growth prospects. And South Korea's LG Display (LPL) is a turnaround technology story. TSM has been ramping up production of its line of high-performance 28 nanometer chips, and now anticipates that this product line will account for 10 percent of sales by the second half of this year. That's a testament to the company's technological prowess, as well as to the strong growth in its telecom segment, which was responsible for 53 percent of its sales last quarter. 
The company's orders remain solid and it should start showing revenue growth by the second quarter. Meanwhile, in its most recent quarterly report, LG Display reported continued improvement in earnings, although net profits remain elusive because the company is still in the midst of retooling its operations. However, margins have been expanding and capacity utilization rates have been climbing. Additionally, LG Display has cut costs while its inventory level remains low at around 20 days to 25 days. The company expects further improvement for 2012, as the LCD (liquid crystal display) cycle continues to recover, especially given the limited growth in supply. Although demand for new TVs in the US is hardly robust, it's trending better than market participants had previously forecast. Flat screen televisions still account for roughly 50 percent of LG Display's revenue, so an uptick in demand should add substantially to its bottom line. This is probably the best investment climate I have seen to grow wealth quickly and safely. Learn more about this financial newsletter at Yiannis Mostrous' Passport to Profits. Related articles 
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