Taiwan shares end at new high on strong tech sector after AMD-OpenAI deal

Taipei, Oct. 7 (CNA) Shares in Taiwan smashed closing records to top 27,000 points Tuesday as the bellwether electronics sector continued its momentum after a deal announced by artificial intelligence chip designer Advanced Micro Devices, Inc. (AMD) and AI tool developer OpenAI overnight, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 450.89 points, or 1.68 percent, at 27,211.95 after moving between 27,017.08 and 27,301.42. Turnover totaled NT$556.203 billion (US$18.31 billion).

After strong gains, the market capitalization of the Taiex reached a new high of almost NT$88 trillion.

"The Taiex continued to ride the wave of AI enthusiasm, in particular after the AMD-Open AI deal," Cathay Futures Consultant analyst Tsai Ming-han said. On Monday, AMD announced it will supply AI chips to OpenAI and also agreed to the ChatGPT creator buying a stake of up to 10 percent in the chip designer.

"The deal drove up chip stocks in the United States overnight and it was no surprise that their counterparts in Taiwan followed suit with TSMC (Taiwan Semiconductor Manufacturing Co.) in focus," Tsai said.

After its American depositary receipts rose 3.49 percent overnight, contract chipmaker TSMC, the most heavily weighted local stock, gained 2.50 percent to close at a new high of NT$1,435.00 to boost its market cap to a record high of NT$37.21 trillion.

TSMC's gains contributed about 280 points to the Taiex's rise and sent the electronics index 2.05 percent higher.

Among other semiconductor stocks, IC packaging and testing services provider ASE Technology Holding Co. rose 4.83 percent to end at NT$173.50, and application-specific integrated circuit (ASIC) designer Alchip Technologies, Ltd. added 4.53 percent to close at NT$3,460.00. In addition, memory chip supplier Winbond Electronics Corp. soared 10 percent, the maximum daily increase, to end at NT$42.65 on rising product prices.

Also in the tech sector, shares in AI server maker Quanta Computer Inc. rose 2.83 percent to close at NT$308.50 and rival Wistron Corp. added 1.63 percent to end at NT$156.00, while iPhone assembler and AI server producer Hon Hai Precision Industry Co. closed up 0.88 percent at NT$228.50, off a high of NT$231.50 on profit taking after a fresh sales high in September.

With the electronics sector attracting most market attention, many nontecch lagged behind, dealers said.

King's Town Construction Co. lost 2.20 percent to close at NT$44.40, and JSL Construction & Development Co. fell 2.25 percent to end at NT$52.20.

After the recent solid upturn among "military concept" stocks, Lungteh Shipbuilding Co. dropped 0.35 percent to close at NT$144.00, while fighter jet developer Aerospace Industrial Development Corp. added 0.69 percent to end at NT$58.00.

However, bargain hunters chased select petrochemical stocks with Nan Ya Plastics Corp. surging 7.52 percent to close at NT$41.45, and Formosa Plastics Corp. gained 2.32 percent to end at NT$37.50.

In the financial sector, which rose only 0.11 percent, Fubon Financial Holding Co. rose 0.46 percent to close at NT$86.90, and Cathay Financial Holding Co. added 0.31 percent to end at NT$65.20.

"After the Taiex breached 27,000 points, some investors could pocket their gains to create volatility," Tsai said. "But, as the U.S. Federal Reserve has kicked off a rate cut cycle, high liquidity could possibly ease downward pressure."

According to the TWSE, foreign institutional investors bought a net NT$676.56 million worth of shares on the main board Tuesday.