Morgan Stanley reduces UMC's rating

United Microelectronics Corp (UMC, 聯電) was downgraded to "equal-weight-V" from "overweight" by Sunil Gupta, an analyst at Morgan Stanley & Co, because its wafer shipment growth looks at risk on rising inventory.

The brokerage said in a research report today that it expects UMC's share price to fall to NT$18.50 in the next 12 to 18 months. It didn't give its previous estimate.

Shares UMC, the world's second-largest supplier of made-to-order chips, dropped 0.9 percent to NT$21.6 on the TAIEX.

Separately, Powerchip Semiconductor Corp (力晶半導體) and Nanya Technology Corp (南亞科技), were downgraded by UBS AG because contract prices are unlikely to rise amid oversupply forecasts.

Both chipmakers were reduced to "neutral 2" from "buy 2," Chong Kang-Ho and William Dong, anal-ysts at UBS, wrote in a report yesterday. They said that Nanya Technology's share price may fall to NT$26 from its previous stock prediction of NT$34, without providing a time frame. Powerchip may drop to NT$25 from a previous estimate of NT$40, they wrote.

Powerchip 1.4 percent to NT$21.10 yesterday. Nanya Technology was unchaged at NT$22.30.

The world's third-largest provider of made-to-order chips,Chartered Semiconductor Manu-facturing Ltd (特許), was raised to "buy 2" from "neutral 2" because shipments for a customer are expected in the fourth quarter, said a USB analyst in Singapore.