Wed, Jul 14, 2004 - Page 11 News List

AU Optronics and TSMC lead slide on stock exchange

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The TAIEX fell yesterday, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) after orders at Novellus Systems Inc missed some forecasts, adding to concerns that earnings growth in the chip industry may slow.

AU Optronics Corp (友達光電) dropped on news that some of the nation's flat-panel display makers may report losses next year as plant expansions create overcapacity.

The TAIEX lost 73.17, or 1.3 percent, to close at 5,685.57. About eight shares fell for every three that rose. Futures for delivery this month slipped 0.8 percent to 5,661. A China Daily report that China would conduct sea, air and land military exercises southwest of the Taiwan Strait weighed on companies that run businesses in China.

"Today's focus was on worries over the outlook for the global semiconductor industry, and reports about China's military exercises also triggered concerns," said Winnie Tiao (刁明華), chief investment officer at HSBC Asset Management Taiwan. TSMC slipped 1.3 percent to NT$44.20.

Orders for companies such as Novellus, whose equipment builds circuits in computer chips, are a gauge of the industry's expansion plans. Orders in the second quarter lagged behind chief executive Richard Hill's forecast, sending the company's shares down 4.3 percent in regular trading in New York.

AU Optronics fell 4.1 percent to NT$47. Rival Chi Mei Optoelectronics Corp (奇美電子) fell 3.8 percent to close at NT$51.

"Most recent reports on technology shares are negative, forcing us to cut holdings in electronics shares," said Jim Chang, fund manager at Barits Securities Investment Trust Co (倍利投信).

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