Fri, Nov 12, 2004 - Page 11 News List

TAIEX drops after four days of gains; led by chipmakers

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Stocks fell for the first day in five yesterday, led by chipmakers such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), after Morgan Stanley cut its sales estimate for the industry.

The TAIEX fell 73.97, or 1.2 percent, its biggest drop since Oct. 26, to 5,874.52. Futures due in November lost 1.5 percent to 5,868. More than three stocks declined for every one that gained.

"Industry fundamentals deteriorated significantly in the third quarter," Morgan Stanley analyst Mark Edelstone wrote in a research report on Wednesday.

Global semiconductor sales growth will be between flat and 5 percent next year, down from a forecast of 8 percent to 12 percent, he said.

Gloomy picture

TSMC fell 3.5 percent to NT$46.30, while UMC shed 1.9 percent to NT$20.20.

Hon Hai Precision Industry Co (鴻海精密), the nation's largest electronics company by sales, declined after Cisco Systems chief executive John Chambers said sales growth will slow this quarter.

Hon Hai, which makes Internet communications equipment for Cisco, fell 1.9 percent to NT$128.

"Cisco is the latest gloomy picture for the technology industry," said Eric Huang, a fund manager at Ta Chong Investment Trust Corp (大眾投信).

CMC Magnetics Corp (中環), the nation's largest maker of recordable compact discs, fell 2 percent to NT$15.10 after it said sales fell 29 percent last month from a year earlier to NT$2 billion (US$61 million).

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