Top 10 Asia's Most Valuable Technology Companies in 2023: TSMC Returns to No. 1

Asia Tech Wire (Feb 2) -- TSMC regained its position as Asia's most valuable technology company in 2023.

The year 2023, the first year of the post-epidemic era, is also known as the "Year of AI" in the technology industry.

In this year, artificial intelligence (AI), which is regarded as the next major technological change, has embraced a massive boom. Since Microsoft-backed OpenAI released its chatbot ChatGPT at the end of 2022, companies of all sizes around the world have been scrambling to launch their own AI products in 2023 in an attempt to catch up with this wave of technology.

Thanks to the rise of AI, global tech stocks, which experienced a plunge in 2022, have re-attracted investors in 2023 with a spurt of gains.

Following a 33.1% plunge the previous year, the tech-focused Nasdaq Composite Index accumulated a 43.42% gain in 2023, its best performance since 2020 and second only to its performance in 2009.

Asian stock markets performed well in 2023, particularly in Japan, Taiwan, India and South Korea. Throughout 2023, the Nikkei 225 has surged 28.24%, the Taiwan Stock Exchange Weighted Index has gained 26.83%, India's benchmark Sensex index has risen nearly 18.74% and South Korea's KOSPI index is up 18.73%.

In contrast, China's stock markets lagged a bit behind in 2023. The CSI 300 Index, which covers most of the market capitalisation of the Shanghai and Shenzhen stock exchanges, fell for the third consecutive year, by 11.38%, while Hong Kong's Hang Seng Index fell by 13.82% in 2023, its fourth consecutive year of decline.

Asian tech companies such as TSMC, Samsung, and Toyota Motor have reversed their previous downturn in such an environment, recovering lost ground and rebounding sharply in market cap in 2023. However, shares of Tencent, Alibaba, CATL, etc. continued to fall during the same period, and their market cap shrunk further. In this regard, some industry insiders remarked, "Algorithms and other tech-heavy ones have gone up, and crowd-heavy ones have gone down."

Despite the varied performance of these Asian tech companies in 2023, they are still not to be underestimated and are all leaders in the sector. The following chart shows the top 10 Asian technology companies based on company market cap or valuation and annual changes in market cap as of December 31, 2023.

The market cap or valuation of most of these 10 tech companies has risen over the past year, with Pinduoduo seeing the biggest increase in market cap, nearly 90%. While Reliance Industries Ltd., the parent company of Indian technology giant Jio Platforms, has seen little change in its market cap over the past year, with a rise of less than 1%.

In terms of market cap and valuation at the end of 2023, the biggest winner in the Asian technology sector in 2023 is TSMC, with Samsung and Tencent in the second and third places, and the fourth to tenth places are Toyota Motor, Temu owner Pinduoduo, Reliance Industries, Alibaba, Tata Consultancy Services, TikTok owner ByteDance, and Huawei.

Driven by the AI wave, TSMC (current market cap: $588.08bn), which makes graphics processing units (GPUs) for Nvidia Corp., has seen its market cap jump 39.62% throughout 202, and was the biggest contributor to the rise in Taiwan's Weighted Index. With a market cap of $539.38 billion, it replaced Tencent to reclaim the title of Asia's most valuable tech company in 2023.

In addition to TSMC, Samsung, the world's second-largest semiconductor foundry (current market cap: $373.80bn), is also a beneficiary of the latest tech wave. South Korean chipmaker Samsung rose 37.04% in market cap throughout 2023 to end the year at $401.54 billion, recovering to levels seen at the start of 2022.

Tencent (current market cap: $328.98bn), China's top tech company by market capitalisation, also topped the top three this time around, even though it lost its crown as Asia's most valuable tech company in 2022. Since reaching a high of $502.29 billion in January 2023, Tencent's market cap has fallen until it ended 2023 at $358.92 billion. Taking the tech giant's current market cap into account, this downward trend continues in 2024.

Chinese e-commerce giants Alibaba (current market cap: $181.76bn) and Pinduoduo (current market cap: $168.18bn), both of which had market caps of $198.56 billion and $194.38 billion at the end of 2023, respectively, are not far apart. However, in terms of the change in market cap throughout 2023, the gap between the two is quite large.

Unlike veteran e-commerce firm Alibaba, which recorded a 14.86% drop in market cap, e-commerce upstart Pinduoduo, founded in 2015, has seen its market cap grow from $103.11 billion at the end of 2022 to nearly $200 billion at the end of 2023 thanks to the rapid growth of its overseas business, Temu, an increase of 88.52%, making it the biggest change in market cap of the top 10 tech companies.

With the more substantial market cap growth, Pinduoduo has naturally overtaken Alibaba in the rankings. And in December last year, Pinduoduo had once surpassed Alibaba in terms of market cap, becoming a hot topic of discussion in the tech industry.

However, since Pinduoduo has erased 13.48% of its market cap so far this year, compared to Alibaba's 8.46% over the same period, the latter has overtaken the former again. It is foreseeable that the two tech companies will continue to chase each other in terms of market cap in 2024.

Japan's Toyota Group, which was recently hit by an engine data scandal, has seen its core business, Toyota Motor (current market cap: $272.65bn), reach a market cap of $247.48 billion at the end of 2023, a rise comparable to TSMC and Samsung, which also exceeded 30%.

Toyota Motor disclosed on 30 January that global sales in 2023, including subsidiaries Daihatsu Motor and Hino Motors, totalled 11,233,039 units, an increase of 7.2%, surpassing the all-time high reached in 2019.

Reliance Industries (current market cap: $232.80bn), which has the power to facilitate India's digital transformation, has returned to year-earlier levels by the end of 2023 at $210.29 billion, up just 0.96%, despite its market cap changing up and down over the past year like a roller coaster ride.

ByteDance and Huawei, two private Chinese companies whose latest valuations were $268 billion and $128 billion respectively, remain members of the super-unicorn club. It's worth noting that Huawei, which unfortunately fell off the list last year after losing out to battery giant CATL, has made it into the Top 10 this year by replacing its old rival with a higher valuation.

Overall, the companies on the 2023 list haven't changed much from last year, except for Pinduoduo and Huawei, which replaced food delivery giant Meituan and CATL in the Top 10. In particular, Pinduoduo jumped from outside the Top 10 to fifth place with an 88.52% increase in market cap, the biggest improvement among the ten Asian tech companies.

Meituan and CATL, which ranked 9th and 10th last year, have seen their market cap drop by 52.55% and 26.55% respectively throughout 2023, bringing their market cap to just $65.83 billion and $101.19 billion by the end of 2023, further widening the gap between them and the top ten companies.

The "Year of AI" saw the emergence of big stock gainers like Microsoft, Nvidia, TSMC, and Samsung. With the development of AI, more and more thoughts and explorations about AI regulation will occur in the future, can these tech giants continue to perform well in the stock market? Time will answers everything.

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