Taiwan's key stock index dropped, led by top chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on concerns it will report a drop in first-quarter earnings Friday.
Computer makers such as Quanta Computer Inc (
The TWSE Index fell 8.36, or 0.2 percent, to 5589.34, after rising to a high of 5644.68 and falling to a low of 5567.43.
Within the index, 237 stocks gained and 188 fell. The total value of trade was NT$77.6 billion (US$2.3 billion), compared with this year's daily average of NT$85.5 billion.
Investors said the drop in production utilization rates at semiconductor makers boded ill for their second-quarter earnings.
"Morris Chang, TSMC's Chairman has said utilization rates will fall to 50 percent. That's obviously not a positive sign," said Francis Wong, who helps manage about US$600 million in Asian stocks (ex-Japan) at American Express Asset Management Ltd in Hong Kong.
Further worrying investors were concerns about China's reaction to potential US weapon sales to Taiwan.
The US will offer to sell four Kidd-class destroyers, eight diesel submarines and as many as a dozen reconnaissance aircraft, deferring sales of AEGIS-equipped destroyers, a senior White House official said.
President George W. Bush left open the possibility of an AEGIS sale in the future if China's threat to Taiwan intensifies, the official told a group of reporters.
Chipmakers who make chips on a made-to-order basis fell.
TSMC fell NT$2, or 2.2 percent, to NT$88. The world's biggest made-to-order chipmaker's profit in the three months ended March may have fallen to NT$10.04 billion (US$305.3 million), or NT$0.84 a share, from NT$10.09 billion, or NT$1.32 a share, a year ago, according to five analysts surveyed.
United Microelectronics Corp (UMC,
Some computer makers rose on expectations their revenue will increase as more orders are expected from US manufacturers.
"Taiwan computer makers, because of gains in market share or the overall operating environment, have improved their performance compared to Japanese or Korean producers," American Express' Wong said. "They've been able to take advantage of the cheap labor force across the Taiwan Strait." Acer Inc (
Flat panel display makers rose on expectations demand for their products will pick up as prices have dropped in the past 12 months. Prices of 14.1-inch panels have fallen more than 60 percent since Jan. 1, 2000 to between US$200 and US$240 each.
Acer Display Technology Inc rose NT$1.90, or 4.9 percent, to NT$40.90. Unipac Optoelectronics Corp (
China Man-Made Fiber Corp (中國人纖) fell NT$0.20, or 6.9 percent, to NT$2.72. The Taiwan textile maker failed to meet payments on NT$450 million (US$13.7 million) of bonds due yesterday, the Commercial Times newspaper reported without citing sources.
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