Stocks fell for a third day, led by Quanta Computer Inc (
Chipmakers Taiwan Semiconductor Manufacturing Co (TSMC,
The TAIEX tumbled 94.04, or 2.2 percent, to 4,139.50. The benchmark index has fallen 9.3 percent over the past three days, its steepest fall since the three days that ended Sept. 19, 2001. Only 55 of the 610 stocks on the Taiwan Stock Exchange gained.
MSCI Taiwan futures for April delivery in Singapore declined 1.6 percent to 176.90. The Taiwan Futures Index dropped 2 percent to 4,125.
"We believe many investors have overlooked potential demand implications" of SARS, Kirk Yang, an analyst at Smith Barney, said in a report.
"Technology spending is closely correlated with economic growth, PC and handset demand in China could be negatively affected," he said.
Citigroup has cut its forecast of China's economic growth to 6.7 percent from 7.6 percent, the report said.
TSMC fell NT$1.5, or 3.3 percent, to NT$44.
Citigroup analyst Clark Westmont cut his recommendation for the chip industry to "underweight" from "market weight." Inventories of chips have risen and share prices already reflect earnings prospects, Westmont said in a note to clients.
Quanta Computer, which makes notebook computers at a plant near Shanghai, fell NT$2, or 3 percent, to NT$64. Asustek, which makes more of its motherboards in China, fell NT$3, or 4.3 percent, to NT$66.50.
"Investor confidence has been destroyed by the SARS outbreak," said Reming Yu, chief investment officer at Prudential Securities Investment Trust Co (
CMC Magnetics Corp (中環) rose NT$0.10, or 0.6 percent, to NT$16.40. BenQ Corp (明基電通) fell NT$1.7, or 4.5 percent, to NT$35.80.
Powerchip Semiconductor Corp (力晶半導體) fell NT$0.55, or 6.5 percent, to NT$7.95. It said it turned to a first-quarter loss of NT$2 billion after sales tumbled. The company had net income of NT$611 million a year earlier. Sales, previously announced, fell 18 percent to NT$3.1 billion from NT$3.8 billion.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
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