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Shares of TSMC lower amid concerns over global demand

TAIPEI -- Shares of Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip-maker, fell yesterday amid worries over global demand for the second half of this year, dealers said.

Demand concerns were raised after U.S.-based semiconductor equipment provider Applied Materials Inc. cut its sales and earnings forecasts for 2012, citing weakening demand from Europe and China as a cause, they said.

TSMC yesterday closed down 1.26 percent to NT$78.1, with 58.64 million shares changing hands.

“It seems that foreign institutional investors have turned cautious about TSMC's earnings outlook and have decided to lower their holdings of the stock,” MasterLink Securities analyst Tom Tang said.

On Tuesday, foreign institutional investors were net sellers of 14.48 million TSMC shares.

Yesterday's tumble came despite TSMC's announcement a day earlier of strong second-quarter sales.

TSMC posted NT$128.06 billion in consolidated sales for the April-June period, up 21.37 percent from the first quarter. The numbers beat the company's previous guidance of NT$126 billion to NT$128 billion in sales for the period.

For the month of June, however, TSMC's consolidated sales were down 1.6 percent from May to NT$43.43 billion. The company had reported record monthly highs in sales in both April and May.

“The June figure reversed monthly growth in the previous two months, leading many investors to fear that global demand is slowing down,” Tang said.

“And even worse, the downgrade by Applied Materials has further dampened market sentiment, prompting investors to speculate that TSMC may not enjoy the peak season effect in the third quarter,” he said.

Applied Materials' sales and profit forecast downgrade came after U.S.-based chip-maker Advanced Micro Devices Inc. gave cautious guidance for its second-quarter results. Amid escalating fears over the market outlook for the world's IC sector, the Philadelphia Semiconductor Index in New York fell 2.28 percent overnight.

In local stocks, meanwhile, the weighted index closed up 6.56 points or 0.09 percent at 7,257.91, after moving between 7,202.38 and 7,261.59, on turnover of NT$63.42 billion.

The financial sector and select highly priced electronics stocks, such as smartphone vendor HTC Corp., outperformed the broader market on the back of the bargain hunting, Huang said.

Among the winning stocks, HTC closed up 2.62 percent at NT$313.00, and Mega Financial Holding closed up 3.13 percent at NT$23.10.

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