a possible cause.... but somewhat illogical
Monday March 20 8:45 PM ET
Chip Stocks on Rollercoaster Over Taiwan
SAN FRANCISCO (Reuters) - U.S. and Taiwanese semiconductor and related technology stocks were volatile on Monday in U.S.
trading as growing tensions between China and Taiwan raised investors' fears about the possible impact on the computer and
semiconductor industries.
Shares of some U.S. and Taiwanese companies fell on Monday, after Taiwan elected a new president, Chen Shui-bian, who is
viewed with deep suspicion by China for his past advocacy of Taiwan independence.
The island nation is a big center for high technology, especially semiconductor and motherboard manufacturing and investors fear the
impact of further strained relations between China and Taiwan. Motherboards are the core boards in a personal computer, which
holds all the components.
But analysts said they believed some of the volatility was also just typical of the semiconductor sector, which has been one of the
hottest sectors for investors in the past three months.
``I don't think that pragmatic business people who do business in Taiwan, nor U.S. investors, take it that seriously,' said Lucas Ward,
an analyst at Chase H&Q. ``The earthquake last fall was of much more significant impact...I just talked to a major investor and his
thinking was there isn't going to be a war.'
``China is trying to get into the WTO (World Trade Organization) and my guess is that they wouldn't jeopardize entry into the WTO
by doing anything stupid by invading Taiwan,' said Min Pang, an analyst who follows semiconductor equipment companies for SG
Cowen & Co.
Still, the American depositary receipts of Taiwan Semiconductor Manufacturing Co. (NYSE:TSM - news) fell 8 3/16 to 51 5/16 on
the NYSE on Monday. Taiwan Semiconductor is the world's largest foundry, which manufactures chips designed by other
companies, on a contract basis.
The Philadelphia Semiconductor Index was down four percent, or off 51.38 to 1203.45. Shares of some semiconductor companies,
which design chips and use foundries for manufacturing, also fell. Xilinx Inc. (NasdaqNM:XLNX - news) lost 2 1/8 to 73 3/8 and
PMC Sierra Inc. (NasdaqNM:PMCS - news) dropped 3 3/16 to 207. Rambus Inc. (NasdaqNM:RMBS - news), whose
memory-enhancing technology is used by memory chip makers, many of which are in Taiwan, fell 19 percent to 317 1/16.
But shares of PC chip makers rallied. Intel Corp. (NasdaqNM:INTC - news), which announced two new Pentium III processors,
surged 5 1/8 to 135, Advanced Micro Devices Inc. (NYSE:AMD - news) added 2 to 52 1/8 and memory chip maker Micron
Technology (NYSE:MU - news) jumped 5 1/4 to 133 5/8. |
