The TAIEX fell yesterday, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after J.P. Morgan Securities Inc reduced its earnings forecast for industry leader Intel Corp, suggesting personal computer demand will be slow to recover.
AU Optronics Corp (友達光電) was the second-biggest gainer on the index after a Chinese-language newspaper reported the third-largest flat-panel display maker may turn to a pretax profit of more than NT$13 billion this year.
The index fell 17.84, or 0.3 percent, to 6070.50. Within the index 316 stocks fell and 182 rose. The total value of trade was NT$106.5 billion (US$3 billion), the lowest since Feb. 26 and almost just above the six-month daily average of NT$104.5 billion.
The electronics index, which measures the performance of electronics companies, gained 47 percent in the past four months on optimism a recovery in the US will spur consumers to buy more computers and the chips that run them.
TSMC more than doubled since last year's low on Oct. 3. Investors said such gains are unjustified after US retail sales rose less than expected in February, suggesting demand in Taiwan's largest export market will rebound more slowly than after previous recessions.
"Investors are quite positive about TSMC and United Microelectronics Corp (UMC, 聯電), but some wonder whether profit this year can justify such rapid price gains," said Hsieh Ching-hui, who manages NT$480 million (US$14 million) in stocks at KGI Securities Investment Trust Co (中信投信).
TSMC, the largest made-to-order chipmaker, whose computer-related chips accounted for almost three-fifths of sales in the fourth quarter, fell NT$1, or 1.1 percent, to NT$93. UMC, whose computer-related chips accounted for two- fifths of sales in the fourth quarter, rose NT$0.50, or 1 percent, to NT$52.
AU rose NT$2, or 3.9 percent, to NT$53.50 after the newspaper said the third-largest maker of flat-panel displays may make a pretax profit this year of more than NT$13 billion as rising flat-panel-display prices boost earnings.
Some computer-parts makers fell after US retail sales rose less than expected in February. The US is Taiwan's largest export market.
Asustek Computer Inc (華碩電腦), Taiwan's largest motherboard maker, fell NT$2, or 1.2 percent, to NT$163. Rival Elitegroup Computer Systems Co (精英電腦) dropped NT$4, or 1.9 percent, to NT$205. MiTac International Corp (神達電腦), one of Taiwan's largest makers of personal computers and computer parts, slipped NT$0.50, or 2.5 percent, to NT$19.70.
Recordable compact disc makers fell after reports that the European Commission wants the European Union to levy anti-dumping tariffs on discs imported from Taiwan.
Ritek Corp (錸德), the world's largest maker of recordable compact discs, fell NT$1.10, or 2.8 percent, to NT$38.40. CMC Magnetics Corp (中環), the second largest, fell 80 cents, or 2.8 percent, to NT$27.50. Prodisc Technology Inc (精碟) slipped NT$1.90, or 4.6 percent, to NT$39.50.
Lite-On Technology Corp (源興科技) rose NT$3.50, or 5.5 percent, to NT$67.50 after the computer monitor screen maker said it will book a NT$3.8 billion gain from the sale of 20 million shares it holds in LITE-ON Information Technology Corp (建興電子). Tecom Ltd (東訊) fell 60 cents, or 1.9 percent, to NT$30.40.