Stocks decline amid fears of price drop for DRAM

Stocks fell yesterday, paced by Nanya Technology Corp (南亞科技), the nation's largest maker of computer memory chips, after an industry group said spot prices may drop for the first week in seven as competitors increase supply.

The TAIEX shed 143.39, or 2.1 percent, to 6,736.79. About four stocks declined for every one that gained. Taiwan Index futures due this month shed 2.5 percent to 6,749.

"Demand for computer chips is growing, but perhaps not at the rate some investors have hoped," said Fam Hsieh, a fund manager at Grand Cathay Securities Trust Co (大華投信). "Some stocks have rallied too much too fast."

Nanya Technology fell NT$2.10, or 6.8 percent, to NT$28.60.

The stock has gained 34 percent, compared with the benchmark's 14 percent gain.

Spot prices for 256-megabyte, 333-megahertz double-data-rate dynamic random access memory may fall to as low as US$6.20 this week, the Taiwan-based DRAMeXchange said.

Taiwan Semiconductor Manufacturing Co (台積電), the world's largest supplier of made-to-order chips, slid NT$2, or 3.2 percent, to NT$61. United Microelectronics Corp (聯電) shed NT$1.80, or 5.4 percent, to NT$31.80.

King's Town Construction Co (京城建設) rose NT$3.50, or 6.1 percent, to NT$60.50 on news that Tsai Tien-tsan (蔡天贊), chairman of the property developer, plans to call an election for a new board of directors at Tainan Business Bank (台南企銀) in June, paving the way for him to take control of the lender. Tainan Business rose NT$0.65, or 4.7 percent, to NT$14.35.