Telecom sector takes a plunge

Stocks fell as Benq Corp (明電) and other mobile-phone makers dropped after Ericsson AB reduced sales forecasts, damping optimism about a recovery in corporate profits for makers of parts for communications products.

The TAIEX, which has gained 12 percent since March 1, fell 71.68, or 1.1 percent, to 6,390.62. Within the index, almost two stocks fell for every gainer.

Benq, the nation's largest mobile-phone maker, fell NT$2.50, or 3.1 percent, to NT$79.50 on concern profit in the telecommunications industry may lag expectations. GVC Corp (致福), which makes mobile phones for Ericsson, fell NT$0.70, or 2.6 percent, to NT$26.20.

"There's still no sign of a recovery in the communications sector," said Janet Chang, who manages NT$200 million (US$6 million) in stocks at Barits Securities Investment Trust Co (倍立投信). "It's an excuse for investors to take profits after the market's recent gains."

Asustek Computer Inc (華碩電腦) fell NT$3, or 2 percent, to NT$151. The nation's largest computer-motherboard maker plans to set up a company at the end of April to make low-end motherboards to compete against Elitegroup Computer Systems Co (精英電腦) in China, according to reports. Asustek will invest NT$1 billion in the new company.

China Steel Corp (中鋼), the nation's largest steelmaker, fell NT$0.30, or 1.7 percent, to NT$16.90 after the Board of Foreign Trade approved the import of 125 types of steel from China.

Compal Electronics Inc (仁寶電腦) rose NT$0.30, or 0.6 percent, to NT$48.70.

Nanya Technology Corp (南亞科技), the nation's largest computer-memory-chip maker by market value, rose NT$0.80, or 1.9 percent, to NT$43 on optimism memory prices will stay above the cost of production after Micron Technology Inc agreed to buy most of Hynix Semiconductor Inc.

Sanyo Electric (Taiwan) Co (三洋電) rose NT$0.90, or 6.9 percent, to NT$14 after local media reported the home appliance maker, which is controlled by Sanyo Electric Co, the world's largest maker of mobile-phone batteries, said unaudited first-quarter pretax profit rose more than half from a year ago to NT$135 million.