Taiwan stocks rose 0.75 percent on Thursday to 5-1/2-month closing highs, with DRAM shares rallying after the islands largest DRAM maker Powerchip said the sector was likely to face shortages in the third quarter. The main TAIEX share index climbed 40.18 points to 5,386.56, finishing up for a fourth straight session and logging its highest close since October 7.
The TAIEX hit an intraday high of 5,422.95 in early trade, but gains were pared as investors booked profits from a 9 percent rise on the market so far this week. The semiconductor sub-index rose 0.52 percent while the electronics sub-index gained 0.78 percent.
Shares of Powerchip and smaller rivals Nanya Tech and ProMOS rose by their 7 percent daily limit by the close. Powerchips chairman said on Wednesday the global computer memory chip sector was likely to face shortages in the third quarter, signalling the industry could be bottoming out from its worst-ever downturn.
"The downward trend of DRAM supply is unchanged. But theres a gap between the chairmans estimate for demand and ours," said Bevan Yeh, a senior fund manager of Prudential Financial Securities Investment Trust. Shares of UMC, the worlds No 2 contract chip maker, finished limit-up after its ADRs rallied 12.7 percent on Wednesday.
Local media cited equipment suppliers on Thursday saying that UMCs capacity utilisation rate will likely exceed 60 percent in April, helped by orders from Mediatek and other companies. Turnover rose to a 10-month high of T$147.5 billion ($4.4 billion) ahead of the central banks decision on interest rates later in the day. Turnover was at T$146.9 billion a day earlier.
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