The market was hit hard by the third big technology warning in just over a week, following Nokia and Nortel, as the German chipmaker Infineon said it would make a pre-tax loss of #600 million for its third quarter, far worse than was expected.
Infineon, Europe's number two in semiconductors, which was spun out of Siemens last year, said it could not rule out a loss for its full year and would cut planned investment for next year by more than #1 billion.
The shares, which launched last year at around #70, fell more than 15 per cent to #29.65, a record low. STMicroelectronics, Europe's number one, fell 3.7 per cent to #36.60 and ASM Lithography, the Dutch maker of chip equipment, fell 8.8 per cent to #23.88.
Mr Pasquale Pistorio, chief executive of STMicroelectronics, said yesterday the company expected the global semiconductor market to decline by 17-18 per cent this year, although STMicro itself would fare better than this.
Epcos, another electronics group spun out of Siemens the year before Infineon, fell 3.9 per cent to #63 while Siemens itself fell 4.8 per cent to #71.05. In France, electronics group Sagem lost 9 per cent to #57.80, the first time below #60 since May 1999.
Of the leading telecom equipment makers, Nokia fell 3 per cent to #25.94, Alcatel fell 3 per cent to #24.15 and Ericsson fell 3.7 per cent to #52.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)