Winbond leads stock declines

Stocks fell, led by computer-memory-chipmakers such as Winbond Electronics Corp (華邦電子), after a Salomon Smith Barney Inc analyst said that personal-computer shipments would drop in the second quarter from the first.

The TAIEX fell 73.72, or 1.2 percent, to 6122.54. Within the index, 305 stocks fell, and 195 rose. The total value of trade was NT$131 billion (US$3.7 billion), more than a quarter above the six-month daily average of NT$103.5 billion.

The TWSE Electronics Index, which measures the performance of electronics companies of the TWSE Index, has soared more than half in the past four months on optimism a growing US economy would boost demand for Taiwan's semiconductors and other electronics.

Falling PC demand in the second quarter may dampen chip prices, which have more than quadrupled in the past four months, cutting earnings at chipmakers like Winbond.

"Memory-chip prices are unlikely to rise if PC demand weakens in the second quarter," said Gary Tsai, who helps manage NT$3.6 billion (US$103 million) in stocks at ING CHB Securities & Investment Trust (彰銀喬治亞投信). "For memory-chip companies whose shares have risen so much, that's a cue to sell."

Computer-memory-chipmakers fell on concern semiconductor prices may drop as personal-computer demand weakens in the second quarter. Salomon Smith Barney analyst Richard Gardner forecasts PC shipments in the second quarter will fall as much as four percent from the first quarter.

Yesterday, Goldman Sachs Group Inc downgraded Asia's computer-memory-chipmakers, including Winbond, Nanya Technology Corp (南亞科技), and Powerchip Semiconductor Corp (力晶半導體), citing slower-than expected PC demand and rising chip supply from Samsung Electronics Co and Micron Technology Inc. Samsung and Micron account for more than half the computer-memory chip market.

Winbond fell NT$2, or 6.9 percent, to NT$27.10. Nanya Technology slipped NT$2.30, or 4.8 percent, to NT$45.50. Powerchip fell NT$1.30, or 4.7 percent, to NT$26.50.

Made-to-order chipmakers fell as investors bet their gains in the past month outpaced an anticipated earnings recovery as the US economy resumes growth.

Taiwan Semiconductor Manufacturing Co (台積電), the largest made-to-order chipmaker, fell NT$2.50, or 2.6 percent, to NT$95. United Microelectronics Corp (聯電), TSMC's largest rival, slipped NT$2.50, or 4.6 percent, to NT$52.

Acer Laboratories Inc (揚智科技) rose NT$2.50, or 3.1 percent, to NT$83.50. Microsoft Corp certified Taiwan's third-largest computer chipset maker to use a "Designed for Windows XP" logo on its product packaging, Web sites and advertisements.

Chang Hwa Bank (彰化銀行) and United World Chinese Commercial Bank (世華商銀) rose after the two won approval to open representative offices in China to monitor their clients' business there. Chung Hwa rose NT$0.70, or 5.2 percent, to NT$14.05. United World rose NT$0.70, or 3.6 percent, to NT$20.30.

Macronix International Co (旺宏電子) fell NT$0.80, or 2.5 percent, to NT$30.70. Taiwan's largest maker of memory chips for consumer electronics, licensed microprocessor technology from ARM Holdings Plc, Europe's biggest designer of semiconductors, for chips used in digital cameras, handheld computers and other portable devices.

Mosel Vitelic Inc (茂矽) fell NT$1.10, or 5.6 percent, to NT$18.60. Taiwan's third-largest computer-memory-chipmaker by market value said it would sell up to 60 million shares it owns in subsidiary ProMos Technologies Inc (茂德) to long-term investors.