Shares of local chip designer VIA Technologies Inc (威盛電子) jumped by close to the 7 percent daily limit amid speculation the company is supplying handset chips to Dopod International Corp (多普達) in China through a subsidiary.
The stock price of VIA advanced NT$1.15 to NT$18.15 (US$0.56), outpacing the benchmark TAIEX index's 0.3 percent drop yesterday.
The Chinese-language Commercial Times reported yesterday that VIA is supplying CDMA chips -- made by its fully owned subsidiary VIA Telecom (威睿電通) -- to Dopod, which planned to sell its first low-cost handset in China bundled with a telephone number from China United Telecommunications Corp (中國聯通), China's second-largest mobile operator.
"The company has no comment on orders placed by customers because of confidentiality reasons," VIA said in a filing to the Taiwan Stock Exchange.
Local brand Dopod has been focusing on selling high-end mobile phones running Microsoft Corp's system made by High Tech Computer Inc (宏達電) since its formation in 2004.
In recent years, VIA, a computer chip designer, has diversified to the handset chip market to seek new growth because of shrinking market share.
VIA posted losses of NT$2.63 billion (US$80.8 million) in the first quarter, compared with a net profit of NT$714 million a year ago.
Revenues dropped more than 30 percent to NT$13.99 billion in the first 11 months, compared with NT$20.33 billion in the same period last year, according to VIA.
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