Asustek gains lead TAIEX higher

Taiwan stocks rose, led by Asustek Computer Inc (華碩電腦), after J.P. Morgan Taiwan Securities Ltd raised its recommendation for Taiwan's largest motherboard maker.

"It's definitely a good target, with a solid balance sheet and high growth prospects," said Elise Tung, a computer motherboard analyst at Masterlink Securities Co (元富證券).

Asustek made up 14 percent of the TAIEX's gain of 79.19, or 1.5 percent, to 5,486.73. For the week, it gained 2.9 percent. Within the index, 309 stocks rose, and 192 fell.

The total value of trade was NT$157 billion (US$4.6 billion), two and half times more than the six-month daily average of NT$60.5 billion.

Asustek rose NT$10, or 6.5 percent, to NT$164 after J.P. Morgan upgraded the motherboard maker to "buy" from "long-term buy" with a target price of NT$205. J.P. Morgan cited rising orders from customers such as Dell Computer Corp and Hewlett-Packard Co and rising production in China for the upgrade.

Chipmakers fell after Lucent Technologies Inc, the largest US maker of phone equipment, forecast a wider-than-expected loss and Applied Materials Inc said it's cutting its workforce, damping hopes of a recovery in semiconductor demand.

The Philadelphia Semiconductor Index, a price-weighted index of 16 companies involved in the design and production of chips, fell 6.8 percent, its biggest drop since Oct. 29.

Taiwan Semiconductor Man-ufacturing Co (TSMC, 台積電), the largest made-to-order chipmaker, fell NT$0.50, or 0.6 percent, to NT$83.50. Its US-traded shares fell 5.5 percent to US$17.90. Rival United Microelectronics Corp (UMC, 聯電), whose US-traded shares lost 6.3 percent to US$9.26, fell NT$0.60, or 1.2 percent, to NT$48.80. Winbond Electronics Corp (華邦電子), Taiwan's third-largest memory-chip maker by market value, shed NT$0.90, or 4.6 percent, to NT$18.60.

Makers of light emitting diodes rose after a government-led panel agreed to allow manufacturers to make the devices in China, reducing their costs. Everlight Electronics Co (億光電子) rose NT$0.70, or 3.5 percent, to NT$21.

Acer Laboratories Inc (揚智) rose NT$3.50, or 5.4 percent, to NT$68.50. The chipset maker raised its full-year pretax profit forecast to NT$10.5 million, from a loss of NT$122.6 million, citing better-than-expected sales of high-margin products such as notebook computer graphics chipsets and DVD-ROM player controller chips.