TSMC leads TAIEX gains on go-ahead for plant in China

Stocks gained yesterday after the government said that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) met the last of three conditions that had been stipulated for the company to start construction of its first chip plant in China.

The TAIEX added 16.01, or 0.2 percent, to 6,748.10.

Two stocks declined for every one that gained. Taiwan Index futures due next month rose 0.5 percent, to 6,750.

For the week, the benchmark shed 1 percent, its first weekly drop in four.

A group of industry experts formed by the Ministry of Economic Affairs agreed that TSMC had reached "volume production" at its new plant in this country, the final threshold aimed at protecting Taiwan's technological lead in the semiconductor industry over China's fast-growing semiconductor sector.

TSMC, the world's largest supplier of made-to-order chips, rose 3.2 percent to NT$64.

United Microelectronics Corp (聯電) was the most actively traded issue of the day, adding 3 percent to NT$34 on volume of 289 million shares.

However, the market later lost much of its gains on news that China found two suspected SARS cases on Thursday.

"Investors were still a bit hesitant after the steep fall yesterday, and SARS also played a part" in the market's drop from early highs, said Tu Jin-Lung (杜金龍), a vice president at Grand Cathay Securities (大華證券).

Display makers ended the day with mixed results, with the largest panel maker in the country, AU Optronics Corp (友達), staying flat at NT$72.5. Chunghwa Picture Tubes Co (中華映管) was off 2.2 percent at NT$22.8.