Taiwan's key stock index fell in the heaviest trading in more than seven months, led by VIA Technologies Inc (威盛電子), after Intel Corp said it will continue to pursue legal action against its chipset rival.
The TAIEX dropped 27.99, or 0.6 percent, to 4,580.33, erasing a 2.5 percent gain. Within the index, 390 stocks fell and 126 rose. Since its year low on Oct. 3, the index has surged 33 percent.
"There has been a huge run and a lot of investors have got caught on the wrong side of it and rushed in," said Jasbeena, who helps manage US$135 million in global investments at Wachovia Asset Management Co.
"At some point, there will be a correction but it won't be as sharp as the run up," Jasbeena said.
The total value of shares traded yesterday was NT$126 billion (US$3.6 million), the most since April 19.
VIA Technologies, Taiwan's No. 1 maker of chipsets, fell NT$6, or 4.5 percent, to NT$128. Intel Corp said a recent US court ruling in favor of VIA doesn't mark the end of their legal dispute. The dispute centers around allegations VIA used intellectual property from Intel's Pentium III processor in a chipset the company designed to support a processor from Advanced Micro Devices Inc.
Chunghwa Telecom Co (中華電信) fell NT$0.90, or 1.9 percent, to NT$46.80. The company said it will cut its international mobile calling rates in December in order to win back customers.
Taiwan Semiconductor Manu-facturing Co (TSMC,
"I think there is more upside" in TSMC's shares, said Sue Billat, a managing director at Robertson Stephens in Palo Alto who has a "buy" recommendation on the stock. "A lot of people have underestimated TSMC's strength and as we see more positive news, there's a way to go" for the stock.
United Microelectronics Corp (UMC, 聯電) rose NT$1.30, or 3.1 percent, to NT$39.90. The chipmaker gained after saying it had made chips for Xilinx Inc on 300-millimeter wafers at its plant in Tainan.
UMC may increase its sale of bonds convertible into stock by as much as 40 percent to US$350 million because of a rise in its shares. The stock is up 71 percent since its year low on Oct. 3.
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