Breaking News, World News and Taiwan News.

Electronics sector down on weak US high-tech results

TAIPEI -- The local electronics sector came under pressure Friday morning as investors took cues from the disappointing results released overnight by major U.S. high-tech firms, such as Google Inc. and Advanced Micro Devices Inc. (AMD), dealers said.

Taiwan Semiconductor Manufacturing Co. (TSMC), the most weighted stock on the local bourse, led the high-tech sector to trend lower amid concerns over global demand for the fourth quarter, they said.

“The U.S. high-tech firms' weaker earnings simply confirmed the downtrend in the global high-tech sector,” Grand Cathay Securities analyst Mars Hsu said. “The plunge in share prices overnight drove investors here to cut electronics holdings.”

Due to their grim earnings, Google shares fell more than 8 percent and AMD shares lost more than 5 percent on Wall Street overnight.

Google posted US$9.03 in earnings per share for the third quarter, lower than US$10.65 that the market had previously estimated, while its sales totaled US$11.3 billion, missing a market expectation of US$11.8 billion.

After incurring a net loss for the third quarter, chip-maker AMD forecast its revenue for the fourth quarter will fall 9 percent from the previous quarter, indicating sales could reach as low as US$1.1 billion, lower than a market estimate of US$1.31 billion.

“Before Google and AMD, another U.S. high-tech giant Intel Corp. had disappointed the market by giving a cautious outlook,” Hsu said. “The ongoing earnings season on Wall Street has made many investors here nervous.”

Hsu said TSMC shares encountered relatively heavy downward pressure soon after the local bourse opened after sell-off in U.S. high-tech stocks overnight.

“TSMC shares had appeared resilient in recent sessions. Investors seized the negative lead from U.S. corporate earnings to pocket the gains they had built,” Hsu said.

Hsu said although TSMC beat its sales estimate for the third quarter, the market has concerns over the number for the fourth quarter.

“The third quarter was the peak season for the integrated circuit sector. Following the peak, the sector is faced with inventory adjustments in the fourth quarter and even in the first quarter of next year,” Hsu said.

Hsu said the market has expected TSMC will report a possible 10 percent decline in sales for the fourth quarter from the third quarter, when sales totaled NT$141.38 billion.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   English Courses  |   Terms of Use  |   Sitemap
  chinapost search