Asian Chipmaker Stocks Fall; NEC, Samsung Electronics Lead Drop
By Renee Kim
Tokyo, March 9 (Bloomberg) -- Asian chipmaker stocks such as NEC Corp. and Samsung Electronics Co. fell after Intel Corp. said first-quarter sales will miss targets as slower U.S. economic growth erodes demand for personal computers and networking gear.
Japan's Nikkei 225 stock average fell 0.9 percent, while Taiwan's TWSE index fell 1.1 percent after Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. reported February sales fell. Korea's Kospi shed 1.7 percent and Singapore's Strait Times Index slipped 0.1 percent, led by Chartered Semiconductor Manufacturing Ltd.
``We're really starting to realize how badly these computer- related companies are doing,'' said Yoshio Inamura, who helps oversee $335 million at Tokyo-Mitsubishi Asset Management Ltd. ``Inventory adjustment is expected to last until the latter half of this year, and until then, demand's not going to pick up.''
In other markets, Hong Kong's Hang Seng index was little changed as Legend Holdings Ltd. tracked a decline in the U.S. Nasdaq Composite index, offsetting gains in HSBC Holdings Plc and other banks on hopes U.S. and local interest rate cuts are imminent.
After the U.S. market's close, Intel said first-quarter sales will drop 25 percent. Personal computers and communications- equipment makers are buying fewer chips as they work through existing inventory, forcing Intel to cut targets mid-quarter for the third consecutive period.
The world's biggest chipmaker also said it will cut 6 percent of its workforce over the next nine months. Intel shares tumbled 9 percent in after-hours trading.
NEC, Japan's No. 2 memory chipmaker, fell 3.1 percent to 1711 yen while Fujitsu, Japan's fourth-largest chipmaker, fell 4.2 percent to 1523 yen. The Nasdaq 100 Index futures fell 2 percent in recent trading, suggesting U.S. stocks may open lower today.
Tokyo Electron Ltd., the world's second largest maker of semiconductor production equipment, fell 5 percent to 7490 yen. Advantest Corp., which also makes chip-testing equipment, fell 3.3 percent to 12,140 yen.
Taiwan
Taiwan's TWSE Index fell 73.65 to 5637.37. TSMC, the world's biggest build-to-order chipmaker in the world, fell 2.8 percent to NT$88, after it yesterday said sales in February fell 28 percent from the previous month to NT$11.6 billion ($358 million).
UMC slid 1.9 percent to NT$52.50. The world's No. 2 custom- designed chipmaker said sales in February fell 21 percent to NT$7.5 billion ($231 million). Both TSMC and UMC warned demand for semiconductors continues to drop.
``We are expecting sales to decline slightly more in March to NT$10 billion'' for TSMC, said Keon Han, the regional technology analyst at Bear Stearns Asia Ltd. in Hong Kong. ``First-quarter revenue will likely decline 30 percent from the fourth quarter.''
Silicon Integrated Systems Co. rose 2.9 percent to NT$54 after Taiwan's second-largest semiconductor designer said it signed a licensing agreement with Intel Corp. to make chipsets compatible with the world's largest chipmaker's Pentium 4 processor.
Korea, Singapore
The Kospi lost 9.08 to 570.20. Samsung Electronics, the world's biggest computer memory chipmaker, shed 3.2 percent to 194,000 won while Hyundai Electronics Industries Co., the second largest, fell 2 percent to 3395 won.
``Korean chipmakers are very sensitive to profit warnings from U.S. computer-related companies because they benchmark these companies for forecasting their future earnings,'' said Park Jae Hoon, a strategist at Tong Yang Securities Co.
Other computer-related shares fell. Trigem Computer Co., which exports personal computers to the U.S. and Japan through its affiliates, fell 3 percent to 5270 won. Samsung Electro Mechanics Co., Korea's largest electronic parts maker, fell 1.3 percent to 42,650.
Singapore's Straits Times Index fell 5.00 to 1900.17. Chartered Semiconductor, the world's No. 3 maker of chips to companies' design, fell 1.9 percent to S$5.30. ST Assembly Test Services Ltd., one of the world's 10 biggest semiconductor test and packaging companies, fell 0.5 percent to S$2.04.
Hong Kong
Hong Kong's Hang Seng index was little changed. Legend, China's biggest personal computer maker, fell 4.3 percent to HK$5.60, tracking losses in its overseas counterparts.
Offsetting those declines, HSBC and other banking stocks rose on expectations the U.S. will cut interest rates later this month.
Banks rose before the U.S. announces its February employment report later today. The employment data will provide clues to the extent the Federal Reserve may cut interest rates on March 20 when policymakers meet.
``Banking shares benefit from expectations the U.S. unemployment figure will be mild, leaving room for a rate cut,'' said Patrick Yiu, associate director of Kingsway SW Securities Ltd.
HSBC gained 1 percent to HK$104.50. Hang Seng Bank Ltd., Hong Kong's second-largest lender, rose 0.6 percent to HK$93.25.
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