Stocks climb to an 11-month high; TSMC takes lead

The TAIEX rose to its highest in almost 11 months, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), after it agreed to work with STMicroelectronics NV and Royal Philips Electronics NV to develop smaller and cheaper chips.

The index rose 139.82, or 2.4 percent, to 6097.57, its highest since Feb. 15, 2001. Within the index, 366 stocks rose and 120 fell. The total value of trade was NT$169 billion (US$4.8 billion), more than two-thirds above the six-month daily average of NT$99 billion. TSMC contributed the most to the index's gain on expectation Tuesday's alliance will boost orders from the European companies, increasing sales of TSMC's most advanced chips.

"If you have the same process technology, it's much easier to outsource in the future," said Andrew Lu (陸行之), head of regional semiconductor research at Salomon Smith Barney Taiwan Ltd. TSMC rose NT$3.50, or 3.9 percent, to NT$94.50.

China Steel Corp (中鋼), Tai-wan's largest steelmaker, fell 40 cents, or 2.3 percent, to NT$17.40 on concern sales will drop after the US said it will levy tariffs on most steel imports to give the domestic industry room to rebuild.