Asustek Computer drops, TSMC and Winbond gain

Taiwan's key stock index fell, led by Asustek Computer Inc (華碩電腦), on concern sales of its computer motherboards will begin to slide this month and next.

Leaving the market mixed, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the biggest made-to-order chipmaker, rose after it said yesterday its October sales rose 11 percent from September to NT$10.3 billion ($298 million).

The TWSE Index declined 11.25, or 0.3 percent, to 4,123.78, though it rose 3.1 percent in the week. Within the index, 277 stocks fell and 190 rose.

The index has surged 20 percent since Oct. 3.

"There has been a huge liquidity rush into the market," said Roland Wee, who helps manage about $950 million in Asian equities at ING Investment Management Asia.

"Fundamentals need time to catch up," Wee said.

The total value of trade today was NT$56.4 billion (US$1.6 billion), down 21 percent from NT$71.6 billion yesterday.

Asustek Computer fell NT$2.50, or 2.1 percent, to NT$115.50. ABN-Amro said the company may have sold about 2 million computer motherboards last month, though will probably sell about 1.5 million this month.

TSMC rose NT$0.50, or 0.7 percent, to NT$68. The Semiconductor Industry Association said they expect global chip revenue to rise 6 percent next year compared to a 31 percent decline this year.

Delta Electronics Inc (台達電子) fell NT$1.50, or 3.4 percent, to NT$42.10. The biggest maker of power supplies for computers said its October sales rose 1 percent from September to NT$3.29 billion (US$96 million). The company didn't comment on its results.

Hon Hai Precision Industry Ltd (鴻海精密) rose NT$0.50, or 0.4 percent, to NT$143.50 after the maker of everything in a computer except chips plans to spend up to NT$10 billion in its lawsuit with Tyco International Ltd, a Chinese language newspaper reported, citing chairman Kuo Tai-ming (郭台銘).

Hon Hai, which has garnered 4,247 patents as of last month, accused Tyco, the biggest maker of electrical connectors, of violating its patents for a socket used to connect Intel Corp's latest processor to computer circuit boards. Hon Hai officials couldn't be reached for comment.

Hua Nan Commercial Bank (華南銀行) fell NT$0.10, or 0.6 percent, to NT$17.10.

Hua Nan said it will sign an agreement with Lehman Brothers Holding Inc to sell as much as NT$10 billion (US$290 million) of bad loans to a jointly managed asset manager, as Hua Nan tries to clean up its balance sheet.

The bank, which has been in talks with Lehman for almost a year, would sell a fifth of its estimated NT$50 billion of bad loans at a discount to the venture, which will try to make a profit by getting debtors to repay their loans, Hua Nan senior manager M.S. Liu said, confirming an earlier report by the Taipei Times.

Quanta Computer Inc (廣達電腦) rose NT$0.50, or 0.6 percent, to NT$80. Taiwan's biggest maker of notebook computers said sales in October rose 11 percent from September to NT$10.4 billion (US$301 million).

Quanta shipped 421,000 notebook computers in the month of October to clients such as Dell Computer Corp and Apple Computer Inc.

Winbond Electronics Corp (華邦電子) surged NT$0.95, or 6.9 percent, to NT$14.70, its biggest one-day gain since Sept. 26, after the memory chipmaker said yesterday it will develop with Japan's Sharp Corp flash-memory chips capable of accessing the Internet at high speed.