Nikkei dips as Advantest, chip firms decline

Tokyo, Mar 27: The Nikkei share average dipped 0.73 percent on Tuesday as chip-equipment firms such as Advantest Corp. were sold after brokerage Credit Suisse lowered share price targets across the sector, forecasting lower profit margins.

Shares of Konica Minolta Holdings Inc. advanced 1.2 percent to 1,558 yen.

The maker of electrical machinery said it had formed an alliance with General Electric Co. to jointly develop flexible, paper-thin lighting products using organic light-emitting diode (OLED) technology.

''The brokerage downgrades are having an impact on chip-related stocks,'' said Hideyuki Suzuki, an investment information manager at SBI Securities.

''Also, U.S. stocks were weaker overnight and that isn't helping.'' The Nikkei was down 127.31 at 17,394.65 as of 0103 GMT. The broad TOPIX index was down 0.84 percent at 1,726.77.

Credit Suisse analysts Hideyuki Maekawa and Noriya Nishi lowered their target share prices for seven chip-related companies in a research note on Monday.

Chip-equipment makers will be forced to lower prices as their customers such as manufacturers of memory chips are likely to see earnings decline, Maekawa and Nishi said.

Shares of Advantest fell 2.2 percent to 5,420 yen. Credit Suisse lowered the target price to 4,000 yen from 6,000 yen and slashed its rating on the chip-equipment maker to ''underperform'' from ''neutral''.

Reuters