TAIPEI–Shares in Taiwan closed higher Tuesday as the semiconductor sector led the upturn on the back of newly announced buy-out deals at a time when the global integrated circuit business is in consolidation mode, dealers said.
Siliconware Precision Industries Co. (矽品), the third-largest IC packaging and testing service firm, made a strong showing after Taiwanese rival Advanced Semiconductor Engineering Inc. (ASE, 日月光), the largest in the world, which holds a 25 percent stake in Siliconware, said a day earlier that it will acquire the remaining 75 percent, the dealers said.
Inotera Memories Inc. (華亞科), one of Taiwan’s leading dynamic random access memory (DRAM) chip-makers, attracted significant buying after U.S.-based counterpart Micron Technology Inc. — which already has a 33 percent stake in the Taiwanese firm — announced that it is buying the remaining 67 percent, the dealers said.
Despite the strength of the entire semiconductor sector, the broader market encountered some selling in the latter part of the session as investors locked in their earlier gains amid concerns over a possible interest rate hike by the U.S. Federal Reserve, they said.
The weighted index on the Taiwan Stock Exchange closed up 33.19 points, or 0.41 percent, at the day’s low of 8,073.35, off an early high of 8,140.06, on turnover of NT$72.33 billion (US$2.21 billion). Rebound on Wall Street The market opened up 0.42 percent in a knee-jerk reaction to a rebound on Wall Street, where the Dow Jones Industrial Average closed up 0.68 percent overnight after crude oil prices bounced back, the dealers said.
Buying accelerated, helping the weighted index breach the 8,100- point mark before selling set in, and became more obvious in the late trading session to erode the gains on the broader market at the close, they said.
“Judging from the reduced market turnover, I think that many investors preferred to stay on the sidelines amid rising fears that foreign institutional investors will move more funds out of the region,” Ta Ching Securities analyst Andy Hsu said. “Concerns over a further fund exodus have resulted from the likelihood of a rate hike by the Fed.” Fed’s Meeting