Shares ended yesterday at their highest level in over a month, tracking steep gains in US technology issues overnight.
The TAIEX finished 175.24 points, or 3.2 percent, higher at 5,602.99 in dealings valued at NT$99.37 billion (US$2.9 billion).
The benchmark index last finished above 5,600 on July 14, at 5,623.65. Thursday marked the local bourse's heaviest trading session in nearly three months.
Advancers outnumbered decliners 709 to 57, while 125 issues ended the day unchanged.
"The Taiwan bourse was buoyed by the US market, which investors think has bottomed out. High oil prices up to US$50 a barrel have already been factored in," said Diana Wu, an analyst at Capital Securities (群益證券).
AU Optronics Corp (友達光電), the world's third largest maker of liquid crystal displays used in laptops and televisions, finished 6.9 percent higher at NT$43.2, following a 9.9 percent surge in its American Depositary Receipts overnight.
Its smaller peer Chi Mei Optoelectronics Corp (奇美電子) soared 6.2 percent to NT$44.7.
Shares in computer memory chip makers also traded near the 7 percent daily ceiling Thursday, as the spot price of the most widely used dynamic random access memory chip showed signs of stabilizing after its recent slide.
Powerchip Semiconductor Corp (力晶半導體), Taiwan's largest DRAM maker, surged 6.7 percent to NT$22.3, while rival ProMOS Technologies Inc (茂德科技) climbed 6.7 percent to NT$13.5.
Taiwan Semiconductor Manufacturing Co (台積電), gained 4.5 percent to NT$46.8, while rival United Microelectronics Corp (聯電) added 4.5 percent to NT$23.2.
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