Chip makers push Taiwan stocks near 16-mth high

* Technology shares boosted by Intel's earnings, outlook

* Chinatrust rises after losing bid for AIG's Nan Shan

* China plays edge up on closer China ties

(Adds quotes, details)

TAIPEI, Oct 14 (Reuters) - Taiwan stocks rose 1.31 percent
to their highest close in nearly 16 months on Wednesday, with
chip makers including TSMC (2330.TW) rising after Intel
(INTC.O) reported quarterly earnings that beat market
expectations.

The main TAIEX share index .TWII closed up 99.15 points
at 7,695.75, its highest closing level since June 26, 2008.
Turnover was moderate at T$148 billion ($4.6 billion), compared
with Tuesday's T$129 billion.

TSMC (TSM.N), the world's largest contract chipmaker, rose
2.75 percent, while its smaller rival UMC (2303.TW) jumped 4.87
percent.

"Forecast-beating results and an upbeat outlook from Intel
was quite uplifting, as they eased investors' worries over a
slow fourth quarter," said John Chiu, a vice president at Fuh
Hwa Securities Investment Trust.

TSMC and UMC (UMC.N) topped the list of most-active stock
by turnover and volume, respectively.

A recovery in demand for personal computers also boosted
shares of PC makers.

After its stellar quarterly results, Intel told Reuters
that it is comfortable with analysts' estimates of about 10
percent growth in global PC shipments next year on increasing
appetite for portable computers. [ID:nTP240821]

Acer (2353.TW), the world's No.3 PC brand, rose 1.36
percent after saying its third-quarter revenue would be up
about 5 percent amid a rebound in tech demand. [ID:nTP9260919]

Chiu said shares of Taiwan companies with large investments
in China, including food and transportation companies, could
help support further gains in the main index on renewed
expectations of closer trade ties with China.

Top negotiators from Taiwan and China are planning a
meeting in the second half of December in the island to further
boost trade. [ID:nTP364107]

Financial shares in Taiwan edged up before their U.S. peers
report third-quarter earnings later this week. The bank and
insurance sub-index .TFNI was up 0.61 percent.

Chinatrust Financial (2891.TW), Taiwan's top credit card
issuer, reversed losses in the previous session to rise 0.93
percent, after it lost a bid to Primus on AIG's life insurance
unit in Taiwan. [ID:nTP307656]

HOT STOCKS

-- ProMOS Tech 5387.TWO jumped 6.83 percent after Hynix
Semiconductor (000660.KS) said an improved global economy and
the launch of Microsoft's (MSFT.O) Windows 7 operating system
were expected to support demand for memory chips through the
first half of 2010.

-- Innolux Display (3481.TW), the world's No.2 LCD monitor
maker, rose 3.01 percent after a newspaper reported that it
could supply panels to Apple (AAPL.O).

-- Chip designer Mediatek Inc (2454.TW) rose 1.2 percent
after a newspaper reported that it is likely to sell the 16
million shares it owns in smaller rival ALi Corp (3041.TW) by
the end of the year to focus more on its core business.

ALi shares rose 4 percent.
---------------------TAIEX IN PERSPECTIVE------------------

Move on day 1.31 pct

Close on day 7,695.75

2009 intraday high 7,700.42

2009 intraday low 4,164.19

All-time high 12,682.41 12 FEB 1990
-------------------------------------------------------------

For a table of foreign trading in Taiwan stocks,
double-click on [ID:nTP170358]