TAIEX moves up to 16-month high

The TAIEX rose to its highest in 16 months yesterday, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), on a Chinese-language newspaper report that company chairman Morris Chang (張忠謀) predicts industry sales of computer chips will climb by 17 percent next year.

United Microelectronics Corp (UMC, 聯電) gained after Xilinx Inc, the world's biggest designer of programmable semiconductors, said it will place more orders for chips with UMC as the Taiwanese company has better technology than International Business Machines Corp.

"Semiconductor industry demand will definitely continue to grow next year as demand for personal computers and other consumer electronics improved," said Mike Shiao, a fund manager at Invesco Taiwan Ltd (景順投信).

"Morris' forecast is reassuring for some investors who still have doubts," Shiao said.

His fund gained 19 percent in the past three months, while the TAIEX rose 15 percent.

The TAIEX gained 47.88, or 0.8 percent, to 5,747.14, its highest close since May 17 last year. Turnover was NT$97.15 billion (US$2.84 billion). About two stocks rose for every one that fell.

The futures contract for September delivery rose 0.8 percent to 5,761.

TSMC rose NT$3, or 4.4 percent, to NT$71.50. Rival UMC rose NT$0.20, or 0.7 percent, to NT$30.20.

Formosa Plastics Corp (台塑), the country's biggest maker of polyvinyl chloride, fell NT$0.10, or 0.2 percent, to NT$49.10.