• Investor Mark Mobius is investing in chip stocks
• However, Mobius warns against investments in China
• Most of Mobius’ investments are in Taiwan
That’s why Mobius swears by chip stocks
Emerging markets investor Mark Mobius says he’s currently keen on semiconductor stocks as the US and China both ramp up investment in the sector. Chipmakers are “the most important category in our portfolio,” Mobius said in an interview with Bloomberg TV. Industry-related companies are expected to do well, as both the US and China would pour huge sums of money into semiconductor research and production. Mobius’ sentiment is backed up by the strong start to 2023 chip stocks have had. Investors’ focus has shifted to the sector’s long-term growth prospects and cheaper valuations. Asia is in a good position to benefit from the improving prospects for the sector. The reason for this are global pioneers such as the Taiwanese company Taiwan Semiconductor Manufacturing Co. (TSMC) and South Korea’s Samsung Electronics Co. However, Mobius also explains that the prospects for China and Indonesia are also good. “The technological conflict between the US and China is causing billions of capital – some directly from state coffers – to flow into the chip industry as nation states compete to establish their own semiconductor production facilities,” explains Bloomberg.
Be careful when investing in China
But while Mobius has a strong affinity for the Asian market, he recently warned investors against investing in China. The reason for this is that he currently has no access to his money in China due to capital controls, as he said in an interview with Fox Business.
“I have an account with HSBC in Shanghai. I can’t withdraw my money. The government is restricting the flow of money out of the country,” the investor said. The Chinese government plays a major role in this problem and puts “all kinds of obstacles” in its way. “They don’t say, ‘No, you can’t get your money out,’ they say, ‘Give us all the records from 20 years of how you made that money,’ and so on. It’s crazy,” he continues. “Now we have a government that’s buying golden stakes in companies across China. That means they’re going to try to control all these companies… So I don’t think it paints a very good picture when you see that government is becoming more and more in control of the economy,” Mobius explains.
Most investments are now in Taiwan
After being unable to withdraw his money from China, Mobius went on to explain in the Bloomberg interview that most of his investments are now in Taiwan. “Taiwan is now our largest allocation. Of course it’s Taiwan, a province of China,” Mobius said. “So we actually have exposure to China through Taiwan.” Mobius’ focus on Taiwan is fueled by its optimistic outlook for the semiconductor industry. The island is home to TSMC, the world’s largest semiconductor chip maker. “Technology is number one for us, especially anything semiconductor related,” Mobius told Bloomberg TV.
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