Stocks drop further as Quanta declines on profit concerns

The nation's key stock index fell yesterday, led by Quanta Computer Inc (廣達電腦) on concern profits at the nation's largest maker of notebook computers will be squeezed.

The TAIEX fell 56.52, or 1.2 percent, to 4588.06. Four stocks fell for every one that rose. The total value of trade was NT$50.38 billion (US$1.46 billion).

Quanta last week said its biggest customers, Dell Computer Corp and Hewlett-Packard Co, are asking for lower prices after demand for computers failed to rebound this year. Quanta fell NT$4, or 5.6 percent, to NT$67.

"Margins have been falling much faster than we expected for Quanta," said Bryan Chiang, who helps manage NT$1.8 billion for Invesco Taiwan Ltd (景順投信).

Winbond Electronics Corp (華邦電子), rose NT$0.10, or 0.5 percent, to NT$20.10, after prices of some semiconductors increased. The spot price for a high-speed DDR memory chip rose for a fourth day, gaining 1.5 percent to US$3.45.

Via Technologies Inc (威盛電子), the world's second- largest computer-chipset maker, rose NT$0.90, or 1.9 percent, to NT$47.10. The company said sales last month fell 31 percent to NT$1.9 billion from a year ago.

Silicon Integrated Systems Corp (矽統), the world's third-largest maker of computer chipsets, rose NT$0.60, or 2 percent, to NT$31. The company said that sales rose 61 percent to NT$1.3 billion last month.

DBTel Inc (大霸電子), a mobile-phone maker, rose NT$0.50, or 2.4 percent, to NT$21. The company expects to sell 4 million handsets in China this year after gaining permission from the Chinese government, a Chinese-language newspaper reported.