TAIEX drops; TSMC and Quanta Computer decline

Taiwan stocks fell for the first day in seven after Merrill Lynch & Co cut its 2003 forecast for growth in capital spending in the semiconductor industry.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) paced the drop, down NT$1.50, or 2.1 percent, to NT$70 after its US-traded shares lost 4.4 percent to NT$12.91.

The TAIEX fell 126.51, or 2.4 percent, to 5262.01 as more than four stocks fell for every one that rose. The index had gained 8.4 percent in the previous six days. The total value of trade was NT$61.94 billion (US$1.86 billion).

"The index bottomed in the past two weeks, but the speed of an upturn depends on the strength of the recovery in electronics demand," said James Chen, who manages NT$400 million (US$12 million) in stocks at Ta Chong Investment Trust Corp (大眾電信).

Acer Inc (宏電) fell NT$0.70 cents, or 1.9 percent, to NT$36.70. The only Taiwan computer maker with an international brand name said it expects an operating loss in the second quarter because of a slower-than-expected recovery in demand for personal computers.

AU Optronics Corp (友達光電) plunged NT$2.50, or 6.8 percent, to NT$34.30 after the Market Intelligence Center said flat-panel-display prices will fall by as much as US$10 in the third quarter and again in the fourth as supply rises and computer-makers such as Dell Computer Corp push for lower prices.

Elitegroup Computer Systems Co (精英電腦) rose NT$1.50, or 1.4 percent, to NT$109 after the computer-motherboard maker said June sales more than tripled from a year earlier to NT$5.7 billion.

Quanta Computer Inc (廣達電腦) fell NT$3.50, or 4 percent, to NT$83.50 after it said June sales fell a 10th from the previous month to NT$10.4 billion.

Winbond Electronics Corp (華邦電子) fell NT$1.50, or 7 percent, to NT$20 after computer-memory-chip prices fell yesterday for the first time in eight days.