US tech stocks highly exposed to Asian region

Particularly in today’s turbulent markets, geographical exposure can significantly influence corporate revenues. High dependency on one region can be largely reflected in high variance in corporate earnings and stability. Conversely, having a well-diversified exposure to different regions can shield corporations from such vulnerability. We have previously discussed EU companies’ exposure to the Asian region, now we will highlight a similar story for US-based companies and sectors. This is a relatively simple exercise using the geographical sales split recently added to our global Stock Screener.



As we have previously seen with European stocks, corporations are usually heavily reliant on their own backyards for revenues. This trend continues when we look at US stocks from a sector perspective, as shown in table 1. The US Communications sector including major telecommunication corporations such as AT&T and Sprint, make almost all of their revenue from cell phone and data networks in North American. A similar story can be told for US Health Service and Utility companies which are mainly dependent on the US economy.

Asian exposure to the tech sector
Similar to the EU story, the Electronic Technology sector in the US has the greatest exposure to the Asia Pacific region. With these markets growing at a faster rate than others, many companies look to these markets for boosted earnings. 

Intel receives roughly 67 percent of its revenue from the Asia Pacific region. As many PC manufacturers are located in this region, this does not necessarily mean their end products (computers) are sold here, whereas Intel sells its computer components, mainly processors to manufacturers in this region.  

For similar reasons, flash memory card maker Sandisk, along with hard disc manufacturers Seagate and Western Digital also have significant esposure to the Asian markets as a number of computer manufacturers located in this region use their specialised products as components in their end products.

Today, the largest tech player everyone follows is Apple. Apple has seen good growth in sales within the Asian region during recent years, especially within the smartphone market. As China passed the US in becoming the world’s largest smartphone market in the second half of last year, the region is becoming of even greater importance to the company with roughly 26 percent of total revenues generated within the region. Apple’s main competitor in the Asian smartphone market, Samsung, is also heavily dependent on this region with revenue from there accounting for about half of its total revenue. 

In general, it is important to understand the  'revenue stream’ of the individual stock you invest in, and where the bulk of revenue actually comes from. It is however important to bear in mind that geographic exposure can be more complex than only looking at reported sales. Additional factors, such as currency hedging should be taken into account for a more thorough analysis of individual stocks. Furthermore, even though reported sales may not directly stem from a specific region, the company might be affected by indirect exposure to certain regions through demand for final goods, this for example holds true for companies producing smaller components of various products. Using Saxo Bank’s Stock Screener you can gain a sense of how the revenues of the global stock universe are exposed to different regions.