Dec. 9 (Bloomberg) -- Asian stocks fell, led by semiconductor- related shares such as Samsung Electronics Co. and United Microelectronics Corp., after two U.S. chipmakers cut their sales forecasts.

Tokyo Electron Ltd. and Fanuc Ltd. accelerated declines after a Japanese government report showed an unexpected drop in machinery orders in October because demand from electronics manufacturers fell.

Xilinx Inc. and Altera Corp., the world's largest makers of programmable chips, slid in extended trading after saying sales this quarter will decline more than expected. The forecasts came a day after Texas Instruments Inc. said its customers are continuing to reduce their chip inventory.

``I'm not as bullish now on technology stocks, especially after the negative news on Xilinx and Texas Instruments raised questions about the outlook for sales,'' said Soichiro Monji, who helps oversee $11 billion as senior strategist at Daiwa SB Investments Ltd. in Tokyo. ``Investors are more concerned Japan's economic recovery may falter.''

Japan's Nikkei 225 Stock Average dropped 1.5 percent to 10,776.63, the biggest decline since Nov. 22, at the 3 p.m. close in Tokyo. Morgan Stanley Capital International's Asia-Pacific Index, which tracks more than 900 companies in the region, slid 0.6 percent to 94.85.

In South Korea, the Kospi index lost 1.2 percent after the central bank left its benchmark interest rate at a record low and said growth will slow in 2005.

Only stock benchmarks in China, Hong Kong and Taiwan rose in the region. Indexes in Thailand and India were little changed.

Global Chip Industry

The MSCI Asia-Pacific Information Technology Index, which accounts for about 15 percent of the benchmark's weighting, lost 0.4 percent today, giving up its gain for the year.

Sales of the world's leading chipmakers are an indicator of demand for technology manufacturers in Asia. In 2003, eight of the world's 10 largest memory chipmakers by sales were from Asia, according to Connecticut-based researcher Gartner Inc.

The three U.S. chipmakers were the latest to give an outlook on the global industry after Intel Corp. earlier this month raised its fourth-quarter sales forecast on higher global demand for its processors used in computers.

Samsung Electronics, the world's second-largest chipmaker, slipped 1.6 percent to 413,000 won.

United Microelectronics, the world's second-largest supplier of made-to-order chips, sank 1.5 percent to NT$19.90. Taiwan Semiconductor Manufacturing Co., the world's biggest supplier of made-to-order chips, lost 1.2 percent to NT$48.20.

Asian Customers

Toshiba Corp., Japan's second-biggest chipmaker, declined 0.5 percent to 442 yen. Toshiba said in October that it will make semiconductors for Xilinx.

Xilinx is one of United Microelectronics' largest customers, and Altera is one of the biggest buyers of Taiwan Semiconductor chips. Shares of Xilinx, the largest supplier of semiconductors used in phone systems, slid 7.7 percent in U.S. extended trading, while Altera dropped 8.1 percent. Nasdaq-100 Index futures fell 0.5 percent.

Texas Instruments, which gave a quarterly update the day before yesterday, tumbled 3.9 percent in U.S. trading yesterday, leading the Philadelphia Semiconductor Index, which tracks 18 global chip-related stocks, down 1.3 percent. The company had also narrowed its fourth-quarter sales forecast.

Japan `Sell-Off'

Tokyo Electron, the world's second-largest maker of semiconductor-production equipment, dropped 2.2 percent to 5,810 yen. Fanuc, Japan's biggest maker of industrial robots, slumped 2.2 percent to 6,250yen.

Private machinery orders excluding shipping and utilities dropped 3.1 percent in October, the report showed an hour before the close of trading. The median forecast of 37 economists surveyed by Bloomberg News was for a 2.4 percent increase.

``This is another in a string of disappointing numbers here in Japan,'' said Kirby Daley, a strategist at Societe Generale Securities' Fimat unit in Tokyo. ``This release definitely triggered a sell-off in stocks today.''

Japan's economy expanded less than some economists expected in the third quarter, a government report showed yesterday.

South Korean stocks declined after the central bank left the overnight call rate at 3.25 percent at a monthly policy meeting in Seoul. The Bank of Korea unexpectedly cut the rate by a quarter percentage point at its last meeting on Nov. 11, citing the need to boost domestic demand.

South Korea Rates

The bank lowered its growth forecast for this year to 4.7 percent from 5.2 percent and predicted 4 percent expansion in 2005 because of slumping domestic demand.

``Some investors are disappointed that the bank didn't cut rates again,'' said Han Sang Soo, who manages the equivalent of $947 million at Daehan Investment Trust Management Co. in Seoul. ``Investors were expecting more money to flow into the market after a rate cut.''

China's Shanghai Composite Index advanced 0.9 percent, the biggest gain in the region. The government reported industrial production grew at its slowest pace in 18 months in November, raising optimism measures to rein in the economy without triggering a slump might be working.

The government introduced curbs on credit to industries such as steel, carmakers and real estate to put the brake on rapid fixed-asset investment, which is blamed for an energy shortage and the clogging of the transportation system.

Baoshan Iron & Steel Co., the publicly traded unit of the world's sixth-largest steelmaker, rose 3.5 percent to 6.21 yuan, the highest since Oct. 12.

Lenovo Drops

In Hong Kong, Lenovo Group Ltd., which plans to pay $1.25 billion for International Business Machines Corp.'s personal computer business, fell 4.7 percent to HK$2.55 on concern the deal will reduce the company's profitability.

The purchase, the biggest of a U.S. company by a Chinese company, will make Lenovo the world's third-largest PC maker.

Some investors said it may take time for Lenovo to merge its business with IBM's.

``In the context of Asia, I would prefer not holding a company that has to go outside and buy a foreign asset,'' said Charles Isaac, who helps manage the equivalent of $700 million in Asian stocks at Swissca Portfolio Management in Zurich. ``You don't know what problems there will be in integrating their business and how they will make it work.''

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: December 9, 2004 02:19 EST