Chipmakers drop on price concerns

Taiwan's TWSE Index fell for the fourth day in five yesterday, led by memory chipmakers such as Nanya Technology Corp (南亞科技) on a newspaper report that a rise in chip prices may lag expectations in the second half of the year.

Nanya Technology, the country's largest memory chipmaker, fell NT$0.50, or 1.5 percent, to NT$33.90.

Cheng Loong Corp (正隆) led gains in companies with operations in China after the government this week vowed to present the Legislative Yuan in September with a draft proposal for direct transportation links with China.

"The trend for electronics stocks is still downward, so I'm buying China-concept stocks such as transport companies and businesses with plants in the mainland that would benefit from direct links," said Liu Ju-ming, who manages NT$500 million (US$15 million) in stocks at Asia Pacific Securities Investment Trust Co (金亞太投信).

The TWSE Index fell 8.40 points, or 0.2 percent, to 5,591.02. About three stocks rose for each two that fell. The total value of trade was NT$66.7 billion (US$1.95 billion), more than two-fifths below the six-month daily average.

Cheng Loong, which has factories in China, soared NT$0.50, or 6 percent, to NT$8.80. The country's second-largest paper maker by market value boosted June paper prices more than 10 percent from May as it passed on rising raw material costs to its customers.

China Steel Corp (中鋼) rose NDT$0.70, or 4.1 percent, to NT$17.80. Taiwan's largest steelmaker ranked third in a list of foreign investors' net purchases on Wednesday, a widely watched indicator in Taiwan.