stock 32.8/573/ -5.5

14:31 12Jun09 RTRS-Taiwan stocks post worst weekly drop in 7 mths * Worst-performing index among global markets this week * TSMC drops after Chairman Chang assumes CEO role again * DRAM shares slide after TMC's plans to buy stake in Elpida * Tourism shares gain on China hopes, ignores flu pandemic (Adds details and quotes) By Gina Chang TAIPEI, June 12 (Reuters) - Taiwan stocks closed down 1.81 percent on Friday to post its worst weekly drop in 7 months, as contract chipmaker TSMC <2330.tw> led tech shares lower after announcing that its chairman will take over as CEO again. The main TAIEX share index <.TWII> ended 119.14 points lower at 6,448.23, finishing the week 6 percent lower and the worst-performing index among 30 major markets tracked by Reuters. The fall was also the index's worst weekly performance since November last year. Turnover was light at T$128.8 billion ($3.9 billion), higher than the T$116.7 billion recorded on Thursday. The market could be trading in a tight range between 6,400-6,700 points next week as investors became cautious following a recent rally, analysts said. Despite its dismal performance this week, the TAIEX is still one of the world's best performing markets so far this year, and has jumped about 58 percent since touching the year's trough in late January. Taiwan Semiconductor Manufacturing Co Ltd (TSMC) , the world's largest contract chip maker, slid 3.95 percent after Chairman Morris Chang said late on Thursday he will replace the incumbent CEO Rick Tsai. [ID:nTP279120] "Chang taking over as CEO again will help reinforce the running of the company," said Wang Kao-hsiung, president of KGI Securities. "But the decision to replace Tsai might indicate that TSMC's progress in manufacturing chips needed for more advanced processes is falling behind expectations." Some analysts also said they think the move could have a negative impact on TSMC as it will eventually need to seek a successor for the 78-year-old Chang within a few years. [ID:nTP187140] DRAM shares also slid after spot prices dropped in recent sessions, and were further dampened by Taiwan Memory Co's (TMC) plan to acquire an about 10 percent stake in Japan's Elpida <6665.t>. [ID:nTP325749]. Government-backed TMC aims to overhaul Taiwan's struggling DRAM sector. "It remains to be seen what Elpida will offer TMC after TMC takes a stake in Elpida," said Bevan Yeh, a senior fund manager of Prudential Financial Securities. "There already are some market expectations that Elpida will not give a licence (of its technology) for free to TMC." Shares of Powerchip <5346.two>, the island's top DRAM maker, lost 5 percent. Smaller rivals Nanya Tech <2408.tw> and ProMOS Technologies <5387.two> slipped 2.5 percent and 6 percent, respectively. The semiconductor sub-index <.TSII> fell 3.4 percent, worse than a 2 percent fall of the electronics sub-index <.TELI>. However, tourism shares outperformed as investors continued to bet that more Chinese tourists will visit in coming months, ignoring news that the World Health Organization had declared the first influenza pandemic since 1968. The executive of a Chinese household goods maker said his company would offer 8,000 workers Taiwan trips in November, bringing in at least T$500 million worth of opportunities to local companies, local media reported on Friday. The tourism sub-index <.THOI> rose 0.2 percent, with hotel operator Formosa Hotel <2707.tw> up 1.12 percent. --------------------TAIEX IN PERSPECTIVE-------------------- Move on day -1.81 percent Close on day 6,448.23 2009 intraday high 7,084.83 2009 intraday low 4,164.19 All time high 12,682.41 12 FEB 1990 ------------------------------------------------------------ For a table of foreign trading in Taiwan stocks, double-click on [ID:nTP170358] (US$1=T$32.8) (Editing by Jacqueline Wong) ((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging:gina.chang.thomsonreuters.com@reuters.com)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) ASIA-PACIFIC STOCK MARKETS: Pan-Asia......[STXNEWS/AS] Japan........[.T] S.Korea....[.KS] S.E. Asia............[.SO] Hong Kong...[.HK] Taiwan.....[.TW] Australia/NZ.........[.AX] India.......[.BO] China......[.SS] OTHER MARKETS: Wall
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