TAIEX drops, TSMC leads as chipmaker Nanya sees gains

Stocks fell for a third day yesterday, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) on concern export growth is slowing.

Computer memory chipmakers such as Nanya Technology Corp (南亞科技) and ProMOS Technologies Inc (茂德科技) gained on a report Intel Corp may buy a stake in ProMOS. Intel is considering spending US$30 million to buy a stake in ProMOS, a local newspaper reported.

The TAIEX fell 12.41, or 0.25 percent, to 4,909.31. About six stocks slid for every five that gained. July futures on the index lost 0.4 percent to 4,906.

The index had gained 14 percent this quarter prior to today.

"Some Taiwanese stocks have rallied too much, too fast in recent months," said Jerry Chen, head of research at First Global Investment Trust Co (元大投信), which manages the equivalent of US$636 million in Taiwan stocks.

"More investors are now nervous whether the economy is truly recovering and whether corporate earnings can further the rally," he said.

TSMC, the world's largest maker of computer chips on a subcontracting basis, fell NT$0.50, or 0.9 percent, to NT$57. Rival UMC shed NT$0.50, or 2.1 percent, to NT$22.90.

Nanya Technology, the nation's largest computer-memory chipmaker, rose NT$0.30, or 1.2 percent, to NT$24.50. ProMOS Technologies, the country's second-largest computer memory chipmaker, rose NT$0.95, or 6.9 percent, to NT$14.70.

Chunghwa Telecom Co (中華電信) fell NT$1, or 1.9 percent, to NT$52. The company said its board of directors will discuss plans to buy back its own shares.