Taiwan shares ended up 0.27 percent to a 3-week closing high on Wednesday, with stocks such as TSMC leading the index, but BenQ continued to drop after it announced its fifth straight quarterly loss.
The main TAIEX share index gained 20.83 points to 7,757.03, with the electronics sub-index rising 0.3 percent and the bank and insurance sub-index up 0.11 percent.
Turnover was sluggish at T$85.01 billion ($2.6 billion), lower than T$104.09 billion in the previous day when the index had slipped from a 3-week high.
"The market gained today, but momentum is currently not that strong. Foreign investors have been selling stocks and we could see a wider dip in April. However, it should be stable until the end of March," said Sinopac Securities analyst Alvin Teng.
Blue chip stock Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chip maker, rose 0.72 percent, while smaller rival United Microelectronics Corp (UMC) advanced 0.78 percent.
The Economic Daily reported that the finance ministry is preparing a plan to reduce taxes, which would see the maximum corporate tax rate drop to 15 percent from a current 25 percent, and the top individual rate drop to 35 percent from 40 percent. Analysts said the new plan could be a boost to the local market if it is carried out.
BenQ shares closed down 2.2 percent after it announced a fourth-quarter losses and the company rejected an offer by its chairman to resign following a probe into possible insider trading by executives.
Hon Hai shares eroded earlier gains and ended flat, while Chi Mei advanced 0.58 percent after the firms said that they have joined forces to form Ampower, a venture making components for LCD televisions, with each side contributing US $14 million to the project.