Taiwan Semiconductor Manufacturing Co., the world's largest made-to-order chip supplier, and other chip-related stocks in Asia fell after Intel Corp. forecast first quarter sales that disappointed analysts.
Taiwan Semiconductor's stock fell 4.6 percent to NT$61.60 at the 1:30 p.m. close in Taipei, its biggest decline since June 11, 2004. Shares of United Microelectronics Corp., the world's second-largest made-to-order chipmaker, slipped 4.8 percent to NT$17.85. The Morgan Stanley Capital International Asia Pacific Information Technology Index tumbled 3.8 percent, headed for its biggest decline since May 17, 2004.
Investors look to forecasts by Intel, the world's biggest chipmaker, to gauge how the semiconductor industry will perform this year. The company posted fourth-quarter profit and revenue that disappointed investors and gave a first-quarter sales forecast that may miss even the lowest projection of analysts.
"Intel's poor forecast has affected how investors view the industry," said George Wu, who helps manage US$2 billion of assets including shares of Taiwan Semiconductor and United Microelectronics at Invesco Taiwan Ltd. "It's a bad beginning."
Santa Clara, California-based Intel said fourth-quarter profit rose 16 percent to US$2.45 billion. Sales rose 6.3 percent to US$10.2 billion, falling short of its projection. The company forecast first-quarter sales of between US$9.1 billion and US$9.7 billion, which may miss the lowest analyst estimate of US$9.5 billion.
Intel lost market share and demand for desktop computers wasn't as high as it traditionally is during the holidays, Chief Financial Officer Andy Bryant said in an interview yesterday.
"Intel's results shouldn't come as a big surprise as it has been losing market share," said Alan Richardson, who helps manage US$3.2 billion of assets, including shares of Asustek Computer Inc., at Baring Asset Management Ltd. in Hong Kong. "Still, foundry and testing stocks will see some pressure.'
Shares of Chartered Semiconductor Manufacturing Ltd., the world's third-largest made-to-order chipmaker, declined 3.1 percent to US$1.26 Singapore as of 2:15 p.m. in Singapore. United Test & Assembly Center Ltd., Singapore's No. 2 provider of computer chip-testing services, fell 4.1 percent to 81 Singapore cents.
Shares of Hong Kong-listed Semiconductor Manufacturing International Corp., China's largest chipmaker, lost 3.5 percent to HK$1.12.
Advantest Corp., the world's biggest maker of equipment used to test memory chips, dropped 1.9 percent to 11,930 yen as of the 2:40 p.m. close of the Tokyo Stock Exchange. The market shut early after a surge in orders overloaded its computer system. Tokyo Electron Ltd., the world's second-largest maker of chip- production equipment, fell 4.2 percent, to 7,860 yen.