Taiwan stocks fell on concern that demand for the island's electronic goods may falter after Federal Reserve Chairman Alan Greenspan said a US economic recovery may not have enough strength to endure. The world's largest economy buys more than a fifth of Taiwan's exports.
United Microelectronics Corp (UMC, 聯電) led declines after the US-traded shares of the second-largest maker of made-to-order chips fell Friday.
The TAIEX dropped 75.73, or 1.3 percent, to 5611.86, after falling as much as 1.9 percent, as 407 stocks declined and 120 rose. Shares worth NT$105.3 billion (US$3 billion) changed hands, down from Friday's NT$196.1 billion.
"Taiwan depends on technology and I would argue the global economic rebound will not be as strong there as in other sectors," said Steven Barton, who helps manage about US$600 million in Asian stocks at Abbey National Asset Managers in Glasgow.
Barton said he's been selling Quanta Computer Inc (廣達電腦) and Au Optronics Corp (友達光電).
"Taiwan has risen so far, so fast that's its difficult to justify share prices in terms of future earnings," he said. The index has surged 63 percent since Oct. 10, when it closed at its lowest point since Jan. 30, 1993.
UMC shed NT$1, or 2.2 percent, to NT$45.60. The company's US shares fell 2.7 percent to US$8.80 Friday. The Philadelphia Semiconductor Index, a price weighted index of 16 companies that design and make chips, fell 1 percent Friday.
Memory chipmakers fell on concern a sluggish US economy will damp demand for computers.
Mosel Vitelic Inc (茂矽電子) declined NT$1.4, or 7 percent, to NT$18.7. Powerchip Semiconductor Corp (力晶半導體) shed NT$1.4, or 4.8 percent, to NT$27.6. Pro Mos Technologies Inc (茂德科技) dropped NT$2.4, or 6.7 percent, to NT$33.3. Winbond Electronics Corp (華邦電子) fell NT$1.9, or 6.9 percent, to NT$25.6.
Quanta rose NT$1.5, or 1.1 percent, to NT$138.5. The biggest maker of notebook computers in Taiwan said Friday its sales this year may rise 34 percent to US$5 billion as customers order more.
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