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Wed, Aug 08, 2001 - Page 18 News List

Semiconductors drop on Lehman, Salomon reports

GLOBAL IMPACT TSMC led stocks lower for a second day after the two brokerage firms said industry leader Intel will slash chip prices in an attempt to boost sales


Taiwan stocks fell a second day, led by Taiwan Semiconductor Manu-facturing Corp (TSMC, 台積電), after Lehman Brothers Holdings Inc and Salomon Smith Barney Inc said industry leader Intel Corp. will slash chip prices, suggesting global profits may deteriorate.

The TWSE Index dropped 66.73, or 1.5 percent, to 4,404.00, after earlier falling as much as 2.3 percent. Five stocks fell for every two that rose.

Intel wants to recoup sales from rival Advanced Micro Devices Inc and plans to "detonate a price bomb," Lehman analyst Dan Niles wrote in a report. Salomon Smith Barney Inc analyst Jonathan Joseph also said Intel will lower semiconductor prices.

TSMC accounted for nearly a third of the index's decline. The total value of trade yesterday was NT$35.71 billion compared to NT$40.78 billion Monday and NT$71.66 billion Friday.

TSMC dropped NT$2, or 2.9 percent, to NT$66 on concern prices for their products may drop further if Intel, the biggest chipmaker, cuts its prices. TSMC's American Depositary receipts Monday fell US$0.53, or 3.2 percent, to US$15.92.

United Microelectronics Corp (UMC, 聯電) fell NT$2.30, or 5.8 percent, to NT$37.20. UMC's ADRs Monday fell US$0.02, or 0.1 percent, to US$14.28.

China Development Industrial Bank (中華開發銀行) fell NT$0.30, or 1.4 percent, to NT$21.40. The lender's former president Benny Hu (胡定吾) denied allegations that he embezzled money from the island's biggest lender by market value. Taiwan prosecutors received an anonymous letter alleging the banker embezzled several hundred thousand Taiwan dollars, and Hu delivered a sworn statement of denial to a Taiwan court yesterday, he said in comments to reporters that were televised by TVBS.

Chunghwa Telecom Co Ltd (中華電信) fell NT$0.80, or 1.8 percent, to NT$44.20. The company said its second-quarter sales in the three months to June 30 were NT$46.32 (US$1.34 billion) compared to NT$46.08 billion last year.

GVC Corp (致福) fell NT$0.60, or 4.4 percent, to NT$13.10. The mobile phone maker for Ericsson AB said sales in July fell 21 percent on year and 42 percent from the previous month to NT$880 million after it completed the transfer of its computer unit to Lite-On Technology Corp (源興科技).

Macronix International Ltd (旺宏電子) fell NT$0.40, or 1.3 percent, to NT$29.50. The maker of flash memory chips said after the market closed that its second-quarter net income was NT$500 million, worse than the average estimate of NT$639.8 million by five analysts surveyed by Bloomberg.

VIA Technologies Inc (威盛電子) fell NT$5, or 2.4 percent, to NT$208. The nation's biggest chip designer dropped on concern Intel is reluctant to license technology for its latest central processing unit, the Pentium 4 which is about 50 percent faster than the Pentium 3.

Computer and motherboard makers rose on expectations that if Intel Corp cuts chip prices further demand will rise.

Compal Electronics Inc (仁寶電子) rose NT$1.10, or 2.9 percent, to NT$39. Acer Inc (宏電) rose NT$0.20, or 1.1 percent, to NT$18.40. Asustek Computer Inc (華碩電腦) rose NT$3, or 2 percent, to NT$153. Gigabyte Technology Ltd (技嘉科技) rose NT$1, or 1.2 percent, to NT$84.

All four stocks were among the 19 most attractive stocks by value yesterday on the Taiwan Stock Exchange, according to Bloomberg analytics.

Mosel Vitelic Inc (茂矽電子) fell NT$0.25, or 2 percent, to NT$12.05. Promos Technologies Inc (茂德科技) fell NT$1.40, or 6 percent, to NT$22.10. Winbond Technology Corp (華邦電子) fell NT$1, or 4.3 percent, to NT$22.20.

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