Taiwan stocks rose after US manufacturing expanded in February for the first time in 19 months, signaling a recovery in demand for chipmakers such as United Microelectronics Corp (UMC, 聯電) from their biggest export market.
Computer-related exporters also gained after the Nasdaq Composite Index had its biggest rally since Dec. 5. Silicon Integrated Systems Corp (矽統) rose after saying sales last month increased more than a quarter.
The TAIEX rose 193.70, or 3.4 percent, to 5874.48.
Within the index, 463 stocks rose and 48 fell. The total value of trade was NT$131 billion (US$3.7 billion), more than a third higher than the six-month daily average of NT$97.2 billion.
"It does look like things in the US are on the mend," said David Loomis, chief strategist at Primasia Securities Co.
"We have seen strong monthly sales from the listed companies in Taiwan."
The TAIEX, 64 percent of which is made up of electronics stocks, and the Nasdaq, 49 percent of whose market value is computer and telecommunications stocks, have had a correlation of 0.7 over the last six months. That indicates they move in tandem with each other about 70 percent of the time.
Chipmakers rose after the Philadelphia Semiconductor Index, a price-weighted index of companies that design and make chips, soared 11 percent on Friday on optimism an economic recovery in the US will boost demand for semiconductors.
Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電), the largest made-to-order chipmaker, which sold more than two-thirds of its semiconductors to the US last year, rose NT$5.50, or 6.8 percent, to NT$86.50. Its US-traded shares rose 7.1 percent to US$17.41, their largest gain since Dec. 5.
Rival UMC rose NT$3, or 6.4 percent, to NT$50. Its US-traded shares added 8.9 percent to US$9.20. The second-largest made-to-order chipmaker, which on Friday topped the list of net purchases by foreign investors, bought back 8.4 million of its own shares for NT$391 million.
Among memory chipmakers, Nanya Technology Corp (南亞科技) rose NT$2.20, or 5 percent, to NT$46.10. Winbond Electronics Corp (華邦電腦), the second-largest memory chipmaker, gained NT$1.70, or 6.8 percent, to NT$26.70. Mosel Vitelic Inc (茂矽), the third largest, soared NT$1.20, or 6.9 percent, to NT$18.70.