Stats Chippac stock surged 7.5 percent to USS$1.57 at the end of trading, the highest close since April 29, 2004. Shares of Taichung, Taiwan-based Siliconware gained 5.3 percent to NT$59.2 in Taiwan.

Demand in the chip industry is recovering as companies including Analog Devices Inc. work off excess stock piles. Analog, which makes chips used in cell phones and automobiles, last week said customers are raising orders.

"Stats has the greatest scope for margin expansion" among its competitors, Nomura analysts Chitra Gopal and Shailesh Jaitly wrote in a report dated Feb. 23. Analog Devices is a customer of Singapore-based Stats Chippac, Southeast Asia's biggest chip tester and packager. Nomura, which upgraded the rating of Stats Chippac stock to "strong buy" from "buy," has a 12-month target price of S$1.80 on the shares. The stock has climbed 19 percent in the past two trading sessions on optimism chip demand will rebound.

The brokerage raised its rating on Siliconware to "buy" from "neutral" on potential market share gains in the wireless industry.

Nomura downgraded its share rating on Advanced Semiconductor Engineering Inc., the world's largest chip packager and tester, to "neutral" from "buy," citing "uncertainty" over the company's outlook this year.