Stocks end the week higher as chips demand picks up

Stocks advanced for a second day yesterday. Macronix International Co (旺宏電子), the nation's largest maker of flash-memory chips, rose after a J.P. Morgan Securities Inc report said that demand for the chips is picking up in Asia.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), the world's biggest makers of computer chips on a subcontracting basis, rallied after a Lehman Brothers Inc report suggested chip demand may be improving.

"Computer replacement demand coupled with the year-end holiday season in the US will continue to fuel Taiwan exporters' profit," said Yu Reming, who manages the US$148 million Balanced Fund at Prudential Securities Investment Trust Co (保誠投信) in Taipei. "Electronics makers will benefit the most."

The TAIEX rose 47.93, or 0.8 percent, to 5,747.79, extending Thursday's 2.1 percent advance.

For the week the index gained 1.7 percent. About seven stocks gained for every three that fell. The futures contract for October delivery rose 0.4 percent to 5,742.

About 4 billion shares changed hands, 9 percent below the three-month daily average.

Yu expects the TAIEX to top 6,000 before year-end.

Macronix rose NT$0.60, or 6.5 percent, to NT$9.80. TSMC climbed NT$1.50, or 2.2 percent, to NT$70, while UMC added NT$0.30, or 1 percent, to NT$29.50.

Chinatrust Financial Holding Company Ltd (中信金控) rose NT$0.10, or 0.3 percent, to NT$29.70. Credit card issuance by its unit Chinatrust Commercial Bank (中國信託銀行) will probably rise to 5.8 million cards by the end of this year from 5.4 million cards, Chinatrust Financial said.

Construction, up 4 percent, was the strongest performing subindex.