Asian Chipmaker Stocks Fall; Hitachi, Samsung Electronics Drop
South Asia News
Mon, 12 Mar 2001, 11:43am HKT
Asian Chipmaker Stocks Fall; Hitachi, Samsung Electronics Drop
By Brett Cole
Tokyo, March 12 (Bloomberg) -- Asian semiconductor stocks fell, led by Hitachi Ltd. and Samsung Electronics after Intel Corp., the world's biggest chipmaker, cut its sales forecast, raising concern the slowdown in the industry is worse than expected.
Japan's Nikkei 225 stock average fell 3 percent, while Korea's Kospi dropped 2.9 percent and Taiwan's TWSE Index slid 1.5 percent. Singapore's Straits Times Index fell 1.9 percent, led by Datacraft Asia Ltd.
``Disappointment in Intel's earnings forecast geared investors' attention back to profit concern in similar Japanese companies,'' said Shunsuke Nishino, a general manager at Daiwa Securities Co.'s equity department in Tokyo.
Intel last week said it plans to cut 5,000 jobs and expects first-quarter sales to decline 25 percent from the previous three months. That's more than the 15 percent drop it predicted in January.
The U.S. Nasdaq Composite Index, which is more than two- thirds computer-related and telecommunications shares, fell 5.4 percent on Friday after Intel cut its sales forecast. The Nasdaq is now 59 percent down from its record on March 10 last year.
In Japan, the Nikkei 225 dropped 378.45 to 12,249.45. Hitachi fell 2 percent to 976 yen on a Nihon Keizai newspaper report that the company lowered its annual group profit forecast by a fifth to about 100 billion yen ($837 million) for the year ending March 31, on weaker demand and lower prices for semiconductors and liquid crystal displays. A company spokesman said the report was ``based on speculation.''
Hitachi may join Toshiba Corp., NEC Corp. and other major Japanese chipmakers that cut earnings forecasts in February as stockpiles of computer chips increased due to the U.S. economic slowdown.
Toshiba fell 3 percent to 642 yen. NEC slid 3.7 percent to 1664 yen. Kyocera Corp., the world's leading manufacturer of ceramic microchip packages, fell 4.2 percent to 9500 yen.
Investors shrugged off a government report showing the economy returned to growth in the fourth quarter, as many economists remain skeptical the rebound will be sustainable as the main supports of growth -- business investment and industrial production -- are being dragged down by slower global growth.
Gross domestic product expanded 0.8 percent in the three months ended Dec. 31, seasonally adjusted, from the previous quarter, government figures showed. Economists had expected growth of 0.6 percent after the economy shrank 0.6 percent in the third quarter.
Political turmoil may also delay the government's efforts to support the economy and stock market. Prime Minister Yoshiro Mori signaled his intention to step down soon, government officials said after meeting with him over the weekend.
The broader Topix Index fell 3 percent to 1209.15.
Korea
Korea's Kospi shed 18.28 to 547.48. Computer-related companies fell after Intel lowered its sales forecast. Samsung Electronics, the world's biggest computer memory chipmaker, lost 3.9 percent to 184,500 won. Trigem Computer Co., which exports personal computers to the U.S. and Japan through its affiliates, shed 6.5 percent to 4860 won.
``The fate of many Korean stocks depends on what direction the U.S. economy will go,'' said Lee Jae Young, who manages about $551 million in Korean investments at Hyundai Investment Trust Management Co. in Seoul. ``The ties between Korean stocks and the U.S. economy seem to be getting stronger.''
Separately, Samsung Electronics said it named as vice president Lee Jae Yong, the son of the chairman of its parent, the Samsung Group.
Taiwan
Taiwan's TWSE Index fell 68.65 to 5611.78. Taiwan Semiconductor Manufacturing Co., the world's biggest build-to- order chipmaker in the world, fell 2.8 percent to NT$85.50. United Microelectronics Corp., TSMC's biggest rival, fell 1.9 percent to NT$52.50.
``Capacity utilization will fall in the first-quarter and second-quarter and revenue and profits are also likely to fall,'' said Janardan Menon, the head of Asian technology research at Kleinwort Benson Securities (Asia) Ltd. ``I plan to revise down my revenue and profit second-quarter forecasts'' for TSMC and UMC.
Ritek Corp. fell 1.3 percent to NT$78, after the world's largest maker of recordable compact discs said Friday it plans to raise as much as $300 million selling bonds convertible into its own shares to overseas investors to expand.
Singapore
Singapore's Straits Times Index fell 30.18 to 1868.14. Computer-related stocks fell after Intel revised its sales forecast.
Datacraft Asia Ltd., which set up a quarter of Asia's communications networking systems, fell 3.3 percent to $4.98. Chartered Semiconductor Manufacturing Ltd., the world's No. 3 maker of chips to companies' design, fell 2.4 percent, to S$4.98. ST Assembly Test Services Ltd., one of the world's 10 biggest semiconductor test and packaging companies, fell 2 percent to S$1.98.
``The sheer weight of bad news coming out from the tech sector is still going to weigh down the market,'' said Gregory Yap, head of research at OCBC Investment Research Pte. ``Most people expect tech companies not to report good results these days.''
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