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Shares fall on Intel news; TSMC, United down

Stocks fell, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday, on concerns that earnings growth at chip-related companies will slow after Morgan Stanley said revenue at Intel Corp may miss forecasts.

The TAIEX index fell 90.21, or 1.6 percent, to 5,746.70 . The TAIEX electronics index accounted for 78 percent of the benchmark's drop. About three shares fell for each that rose. Futures for July delivery shed 1.9 percent to 5,655.

The benchmark fell 1 percent this week, after rising 4.2 percent the week before.

"The Intel news severely hit Taiwan's technology shares, as it could delay the expected high export season," said Winnie Tiao (刁明華), who oversees the equivalent of US$2.4 billion as chief investment officer at HSBC Asset Management Taiwan.

"This triggered worries over the outlook for semiconductors, motherboards and even notebook computers," he said.

Technology companies typically see their annual high export season from August to November, ahead of the Christmas shopping season. Many Taiwanese companies are key suppliers of US brands such as Dell Inc.

TSMC, the world's largest supplier of made-to-order chips, slumped 4.6 percent to NT$46.20.

United Microelectronics Corp (UMC, 聯電), the second-largest, fell 3.2 percent to NT$24.40.

Asustek Computer Inc (華碩電腦), the world's largest maker of boards that connect the chips in personal computers, fell 2 percent to NT$74. Quanta Computer Inc (廣達電腦), the world's largest notebook computer maker, tum-bled 6.3 percent to NT$67. AU Optronics Corp (友達光電), the world's third-largest flat panel display maker, lost 2.2 percent to NT$49.40.

Intel, the world's biggest chipmaker, fell 2.1 percent in regular trading, helping to send the Philadelphia Semiconductor Index to its biggest decline in almost four months.

Mark Edelstone, an analyst at Morgan Stanley, said on the firm's morning call that the midpoint of Intel's third-quarter earnings forecasts will probably be between US$8.5 billion and US$8.6 billion, below the average analyst estimate of US$8.75 billion, according to people familiar with his comments.
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