Chipmakers lead TAIEX to six-month high

Stocks rose to a six-month high, led by Taiwan Semiconductor Manufacturing Co (台積電), after the world's biggest supplier of made-to-order chips received preliminary approval to become the nation's first chipmaker to open a factory in China.

"The approval helps give investors more confidence about the government's policy on letting Taiwan investments into China," said Shen Yen, who manages a NT$5 billion (US$144 million) equity fund at Franklin Templeton First Taiwan Securities Investment Trust Enterprise.

"We won't see a big contribution from investment returns in the short term," he said.

Shen says he's buying more shares of chip designers, steelmakers and producers of raw materials.

The TAIEX rose 85.53, or 1.7 percent, to close at 5,078.80. The index rose to its highest since July 23. Almost two stocks gained for every one that fell. The value of trade was NT$145 billion, the highest level since April 25, 2002.

TSMC gained NT$2.70, or 5.7 percent, to NT$50.50. The company plans to borrow US$418 million from banks in China to help finance the US$898 million factory near Shanghai. Final approval hinges on a review of the chipmaker's financing plans.

Asustek Computer Inc (華碩電腦) rose NT$2.50, or 3.9 percent, to NT$67. Salomon Smith Barney Inc reiterated in a research report to investors its forecast of an 18 percent month-on-month increase in January shipments for the nation's major computer-motherboard makers on rising demand.

BenQ Corp (明基電通), a mobile-phone maker that supplies to Motorola Inc, rose NT$0.10, or 0.2 percent, to NT$41.60. Motorola, the world's second-biggest mobile-phone maker, said consumers worldwide will buy 430 million to 440 million handsets in 2003 as demand increases for the first time in three years.