Taiwan stocks rose 0.88 percent to their highest close in 1-1/2 years on Tuesday, with UMC and other chip shares leading the way on growing optimism over technology demand in 2010. The main TAIEX share index rose 68.73 points to 7,856.00, the highest close since June 23 of 2008.
Turnover was more active at T$111.3 billion ($3.44 billion), compared with T$106.5 billion in the previous session. UMC, the world's No 2 contract chip maker, was up 2.5 percent, while rival TSMC rose 1.13 percent, with the semiconductor sub-index 1.33 percent higher.
"The Philadelphia semiconductor sub-index has been overbought for quite a while, but buying in Taiwan's semiconductor shares was very strong," said Kevin Chung, an analyst with Jih Sun Investment Consulting Co. The sub-index jumped 2.27 percent overnight in US trading.
The electronics sub-index was up 0.93 percent, with Hon Hai Precision Industry, Taiwan's biggest electronics parts maker, climbing 1.44 percent and Mediatek Inc, the island's top chip designer and supplier, 1.52 percent higher. "CES exhibition, the world's largest consumer technology trade show, will take place in the United States in January.
Tech companies are expecting orders to grow on demand for tech products," said Chung. Cathay Financial, Taiwan's top listed financial holding firm, ended up 2 percent to a nearly two-week closing high, despite comments from Industrial and Commercial Bank of China that it was unaware of plans to buy into Cathay.
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