TSMC leads stock decline following slide in NASDAQ

Stocks fell for a second day yesterday, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after a slide in the NASDAQ Composite Index underscored concern that an increase in US interest rates will slow earnings growth.

The TAIEX fell 98.19, or 1.7 percent, to 5,867.51. Almost three shares fell for every one that rose. TAIEX for June delivery shed 2 percent to 5,840.

"The sharp drop in the NASDAQ soured sentiment for technology shares," said Tu Jin-lung (杜金龍), president of Grand Cathay Investment Services Co (大華投信).

TSMC fell 3.6 percent to NT$53, while rival United Microelectronics Corp (聯電) lost 3.8 percent to NT$25.60.

Shares in computer memory chipmakers fell sharply on news that Japanese rival Elpida Memory plans to build the world's largest dynamic random-access memory (DRAM) chip plant.

"DRAM shares are all lower today because Elpida plans to build a huge new plant, so the market will go back to oversupply," said George Wu (吳裕良), an analyst at Primasia Securities Co.

Powerchip Semiconductor Corp (力晶半導體), the nation's largest DRAM maker by revenue, finished 4.6 percent lower at NT$27.1, while ProMOS Technologies Inc (茂德科技) lost 3.4 percent to NT$17.3.

Some shares ended up on the day, particularly in the transportation sector.

China Airlines (華航) rose 3.8 percent to NT$19 after saying sales last month rose 70 percent from a year ago to NT$7.2 billion, according to a Taiwan Stock Exchange statement. Sales rose from NT$7.1 billion in the previous month.