Taiwan stocks hit a 20-month high on Thursday, led by flat panel makers such as Chi Mei Optoelectronics Corp on optimism that demand for LCD TVs would continue to be strong next year.
Adding to the rise, market heavyweight United Microelectronics Corp recouped earlier losses to close up 0.27 percent, a sign that market sentiment was strong.
The main TAIEX share index rose 51.13 points to 6,575.53 points, reaching a 20-month high for a fourth time in two weeks and extending a rally that has boosted the index by 17 percent since late October.
Among the biggest movers, the bellwether electronics sub-index was up 0.98 percent. UMC and Chi Mei were the two most actively traded issues by volume.
Trading volumes were T$154.2 billion ($4.7 billion), compared with T$223.8 billion a day earlier.
Shares of liquid crystal display (LCD) makers rose amid expectations they will benefit from growing LCD TV demand world-wide, some analysts said.
Chi Mei jumped 6.36 percent, AU Optronics was up 1.47 percent, Quanta Display rose 2.27 percent, HannStar Display climbed 1.40 percent and Chunghwa Picture Tubes was up 3.15 percent.
UMC, the world's second-biggest maker of contract chips, rose 0.27 percent to T$18.90 after earlier falling as much as 3.7 percent during the session.
The Taiwan Stock Exchange and regulators said they were reviewing stock sales by executives of UMC. The move intensified a dispute over reporting requirements that led the company to threaten to delist from Taiwan's exchange.
Bigger rival Taiwan Semiconductor Manufacturing Co was off 0.79 percent to T$63.
TSMC's major shareholder Philips Electronics NV said on Wednesday it had acquired 1.928 billion TSMC shares from its fully-owned Taiwan subsidiary.
Cathay Financial Holding Co gained 0.33 percent. Cathay, Taiwan's largest financial holding firm, said before the market closed that its banking unit made an additional T$9 billion write-off in non-performing loans in December.