Technology stocks across Asia were battered yesterday after more gloomy news from bellwether United States industry leaders.
US semiconductor giant Advanced Micro Devices (AMD) and Apple Computer revoked earlier forecasts for the quarter as too optimistic, while Intel said it was taking a US$100 million charge for winding down its Internet services unit.
Stock markets in Taiwan, South Korea and Japan were hardest hit as they are geared towards US technology exports.
Japan's and South Korea's benchmark indices fell to four and five-month lows, losing 3.36 per cent and 4.08 per cent, respectively. Government intervention kept Taiwan's losses to 2.47 per cent, a six-month low. Korean chip makers were also slammed by the threat of an anti-trust investigation into dynamic random access memory chip producers.
Hong Kong held out early in the day because of its relatively low technology exposure. By the afternoon it had succumbed, losing 1.65 per cent to 10,673.11 as large caps such as Hutchison Whampoa, Sun Hung Kai Properties and China Mobile were all kicked down more than 2 per cent.
'It's not panic but [smaller] investors are dumping shares like there is no tomorrow, bigger funds are trimming down their positions and I don't see anyone willing to come in and buy,' said Ryan Fong Yen-hwung, SBI E2-Capital Securities vice-president of institutional sales.
Analysts say the rout in the technology sector goes back to the September 11 attacks, which froze business plans in the United States. Within a few months, US companies found themselves staring at depleted inventories. The resulting surge of orders may have been confused with a recovery in demand.
