Small-cap tech stocks keep the TAIEX on the rise

Shares ended higher yesterday, led by small-capitalized technology stocks.

The TAIEX finished 39.94 points, or 0.7 percent, higher at 6,213.28. Advancers outnumbered decliners 587 to 308, while 107 issues ended the day unchanged.

Dealers said positive reports in local newspapers on memory-chip makers helped stocks, but the sector looks shaky.

The share increases are "unsustainable," said Alex Kao, a vice president at Masterlink Securities Corp (元富證券). "The second quarter is the weakest quarter, seasonally, for techs."

Computer memory-chip packaging and testing companies rose on hopes that a new, speedier commodity-memory chip will become the most widely used chip in desktop computers this year -- and boost their earnings.

Powertech Technology Inc (力成科技) rose 4.9 percent to NT$92.6 and Thailin Semiconductor (泰林科技) added 6.9 percent to NT$26.2.

Local business papers recently reported executives expect a shortage of NAND Flash memory, which would drive up prices.

Kao said memory chipmakers should be able to shift some production from commodity chips to NAND Flash, and he doesn't expect Flash to have a big impact on earnings later in the year.

Chipmaker Taiwan Semiconductor Manufacturing Co (台積電) fell 1.3 percent to NT$53. The company's shares were pressured down after mobile phone chipmaker Texas Instruments, which farms out some orders to TSMC, gave a weaker than expected mid-quarter update.