TAIEX declines as report prompts MediaTek selloff

Taiwan stocks fell yesterday as MediaTek Inc (聯發科技) slumped to its lowest level this year on a report that one of its customers began buying disk-player chipsets from a rival.

The report also said MediaTek, Taiwan's second-largest chip designer, may post worse-than-expected sales in May. MediaTek's stock fell NT$24, or 4.3 percent, to NT$534.

The TWSE Index fell for the first day in three yesterday, losing 109.22, or 1.9 percent, to 5,801.47. Within the index, 396 stocks dropped, 105 stocks gained and 61 were unchanged.

Trading was worth NT$63.5 billion, or 44 percent less than the daily average in the past three months.

Investors say they're waiting for stronger signs of a recovery in the US, Taiwan's second-biggest export market, amid a seasonal lull in demand for personal computers.

"Sales at Taiwan's electronics makers are a leading indicator of the US economy, and we haven't really seen signs of strong growth in April and May," said Jenny Hung, who helps manage NT$1.5 billion (US$43 million) in Taiwan equities at Prudential Securities Investment Trust Co (保誠投信).

Hung recently added shares of computer-memory-chip makers and computer-motherboard makers after their declines were deemed excessive.

Asustek Computer Inc (華碩電腦), Taiwan's largest computer-motherboard maker, had gained as much as 8.3 percent in the past week. Yesterday it fell NT$4.5, or 3.5 percent, to NT$126.

Formosa Plastics Corp (台塑) rose NT$0.20, or 0.5 percent, to NT$42.2.

The Central News Agency reported that two plants operated by Dow Chemical Co, the largest US chemical maker, in the Netherlands lowered production of ethylene because of an electrical failure. That could boost demand for the plastic chemical produced by Formosa Plastics.

Powerchip Semiconductor Corp (力晶半導體) rose NT$0.30, or 1.6 percent, to NT$19. Taiwan's second-largest maker of memory chips said sales will quintuple in the next two years as a new plant using technology from Japan's Mitsubishi Electric Corp begins production.

United World Chinese Commercial Bank (世華銀行) rose NT$0.50, or 2 percent, to NT$25, after the lender opened an office in Shanghai Wednesday, becoming the second Taiwanese bank to expand to China this month.