Taiwan shares rose 1.27 percent on Tuesday to their highest close in more than seven years, led by gains in technology firms such as Elan Microelectronics that are riding up on a consumer boom. The main TAIEX ended up 122.49 points at 9,744.06, with turnover spiking to T$284.71 billion ($8.69 billion) from Monday's T$212.64 billion.
Growing optimism over tech demand has driven the index up by a quarter so far this year. "Market players always search for companies that will benefit from the launch of new consumer products or new applications and Elan is one of the bright stars," said Grand Cathay Securities analyst Kevin Yeh.
Elan Microelectronics Corp, which supplies chips for touch panels in mobile phones and other consumer products, jumped the daily 7 percent maximum to a near seven-year high. Smartphone maker High Tech Computer Corp also went limit-up. Their gains outpaced a 3.78 percent rise on the world's top contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), whose quarterly earnings are due out on Thursday.
The bellwether electronics sub-index gained 1.11 percent and the financial sector was up 1.29 percent. Investors have switched their focus to small-cap growth issues ahead of a slew of second-quarter results from big technology companies to gauge the strength of the tech sector's recovery.
Powerchip Semiconductor Corp, the island's top DRAM memory chip maker, lost 1.13 percent after posting a second-quarter loss on Monday. But the company said it expected a recovery in the third quarter. Rival Nanya Technology Corp, which also swung into the red in the second quarter, fell 1.73 percent.