Tokyo stocks down on tech worries

Matsushita Communication shares fell 3.85 percent Friday morning on fears of a global IT slowdown

TOKYO, Japan -- Tokyo stocks fell Friday morning on worries about high-tech earnings in the U.S. and slowing demand for information technology products.

The benchmark Nikkei 22 average was down 2.00 percent at 12,355.08, after breaching 12,500 for the first time since March 21.

The broader capital-weighted Topix index was down 20.08 points or 1.6 percent to 1254.61.

Other markets in the region were also weaker.

In Australia, the benchmark S&P/ASX200 was down 25 points to 3352.0, a decline of almost 0.8 percent, with telco heavyweight Telstra continuing to fall. It touched a three-year low of A$5.08 mid-morning.

In Seoul, the Kospi lost 10.57 points to 583.03 as SK Telecom and Samsung Electronics declined.

Taiwan's Taiex was down 15.44 points to 4963.76.

Hitachi slips after halting phone chip plant

In Tokyo, Hitachi Ltd slid 2.88 percent to 1,147 yen after it said Friday it had suspended operations at a new cellular phone chip fabrication plant, the latest casualty of the worldwide slowdown in IT demand.

The Nihon Keizai Shimbun business daily also reported that high-tech heavyweight Fujitsu Ltd has begun considering reducing flash memory production, and may even close a plant of its own.

Fujitsu lost 2.35 percent to 1,204 yen.

"It seems we just can't see the bottom of U.S. tech earnings yet. On the domestic front, we have our own problems like this one on Hitachi," said Kunihiro Hatae, general manager of the equities trading division at Tokai Tokyo Securities.

Chip manufacturing equipment makers were battered just as badly, after Dutch semiconductor equipment firm ASML Holding said it could lose as much as $88 million in the first half and withdrew optimistic expectations of a recovery later in the year.

Equipment makers also under pressure

Top manufacturer Tokyo Electron Ltd fell 3.33 percent to 6,970 yen, while Advantest Corp, a major maker of semiconductor testing devices, lost 4.68 percent to 9,580 yen.

Telecommunication equipment maker Matsushita Communication Industrial Co Ltd came under pressure after Britain's telecommunications gear maker Marconi said profit would be halved this year because of the global telecommunication industry slowdown.

Matsushita Communication fell 3.85 percent to 4,990 yen.