Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.

Asia's best-performing technology stocks are all Taiwanese. That fact should give pause to the economists and analysts who've been writing off the Silicon Island in the face of stiff competition and a weakening China.

It also hints at bearishness toward the region's once-mighty Internet players and renewed optimism over a global gadget business that's been battered by the slowdown in the smartphone market, a perennially laggard PC sector and pessimism about Apple's growth momentum.

Leading the charge among the MSCI Asia Pacific Information Technology Index's 111 members are offshoots of two Apple suppliers that are also among Taiwan's most famous names. Casetek Holdings, a supplier of metal casings for Apple devices, is up 29 percent in U.S. dollar terms this year as of Friday's close, outperforming parent Pegatron, which assembles iPhones and is the region's ninth-best performer.

Second on the list is Vanguard International Semiconductor, a subcontractor for its largest shareholder and Apple chip supplier Taiwan Semiconductor Manufacturing Co. VIS focuses on making specialty chips that aren't sexy, but are fundamental to every device, such as display driver and power management chips. It also takes on some overspill orders from its larger partner.

Asia's Tech Winners
Device & component suppliers are outperforming
Source: Bloomberg data. Note: YTD returns as of 19 Feb. 2016

So what do the outperformers have in common? They all manufacture the components that go into electronic devices. None are in the hip new markets of e-commerce, Internet or social media. They don't make software or branded consumer electronics.

Among the top performers are Largan Precision, one of the chief suppliers of camera modules for the iPhone and most other high-end smartphones. A serial outperformer (up 300 percent in the past four years), Largan took a hit in 2015 but is back to form this year.  

Asia's regional technology index was down 8.5 percent by Friday's close, hurt by declines in the likes of last-year's top performer NetEase as well as marquee names Baidu, Alibaba, Tencent and Samsung Electronics.

Number 10 on the list is Korea's NCSoft, the online game maker that announced a share buyback in December. From there, the next handful of names follow the same pattern of supplying bits and pieces for the world's electronics hardware.

Tech Leaders Still Have Upside
Outperformance doesn't mean overpriced

Lest one think this run-up makes these stocks a little pricey, consider that the leading performers are still trading below the index's average blended forward 12-month price-earnings ratio of 15.2. Casetek and Pegatron are trading at under 10. Vanguard is the exception, though barely, on a multiple of 16. (NCSoft trades at a higher valuation than the regional index, though is in line with gaming peers.)

Component makers may seem dowdy compared with Asia's internet hipsters. In the end, though, the world's love affair with gadgets endures.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tim Culpan in Taipei at

To contact the editor responsible for this story:
Matthew Brooker at