Taiex soars to 2-month closing high on Nvidia-MediaTek deal

Taipei, Sept. 1 (CNA) Shares in Taiwan moved sharply higher to end at their highest for two months as investors chased prices in the semiconductor industry due to Nvidia Corp's plan to invest in MediaTek Inc., dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 820.25 points, or 1.78 percent, at the day's high of 46,948.72, the highest closing level since July 1, when the index hit 47,018.99. Turnover totaled NT$1.08 trillion (US$34.10 billion).

On Monday, U.S. AI chip giant Nvidia announced it will invest US$3.5 billion in MediaTek's record US$3.9 billion overseas convertible bond offering, as part of its partnership with the Taiwanese IC designer.

"The Nvidia-MediaTek deal led investors to shrug off U.S. market losses overnight on a spike in crude oil prices amid tensions in the Middle East," Hua Nan Securities analyst Kevin Su said.

"MediaTek is devoted to developing application-specific integrated circuits (ASICs), a field Nvidia has eyed for AI development. Their cooperation has boosted market sentiment on the AI era," Su said.

Shares in MediaTek surged 10 percent, the maximum daily increase, to close at NT$4,315.00, contributing about 190 points to the Taiex's rise.

Buying also spread to other ASICs designers with AIchip Technologies Inc. rising 4.91 percent to end at NT$4,275.00.

"The Taiex's momentum accelerated in the last few minutes with other tech heavyweights, including TSMC (Taiwan Semiconductor Manufacturing Co.), in focus," Su said.

Contract chipmaker TSMC, which accounts for over 40 percent of total market value, rose 1.46 percent to close at NT$2,440.00, contributing about 280 points to the Taiex's increase. IC packaging and testing service provider ASE Technology Holding Co. gained 4.45 percent to end at NT$610.00.

Last-ditch buying was seen among other stocks with iPhone assembler and AI server maker Hon Hai Precision Industry Co. rising 2.40 percent to close at NT$256.00, and passive electronics producer Yageo Corp. rising 4.42 percent to end at NT$610.00.

Printed circuit board supplier Unimicron Technology Corp. saw its losses trimmed from Monday's 10 percent tumble to close down 2.80 percent at NT$971.00 Tuesday after prosecutors launched an investigation into allegations that the company relabeled some products made in China as originating from Taiwan.

The financial sector extended its strength from a session earlier to grow 1.45 percent on stable cash dividend payments.

CTBC Financial Holding Co. rose 2.78 percent to end at NT$66.50. Fubon Financial Holding Co. closed up 0.69 percent at NT$145.00, and Cathay Financial Holding Co. ended up 0.45 percent at NT$111.00.

Among old economy stocks, Shihlin Electric & Engineering Corp. closed up 4.25 percent at NT$208.50, and Fortune Electric Co. ended up 4.39 percent at NT$761.00.

"After today's gains, it is possible for the Taiex to soon challenge the historical intraday high of 48,218 points seen June 23," Su said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$26.71 billion of shares on the main board Tuesday.