The main TAIEX share index ended up 53.95 points at 6,544.63 after a protest on Sunday to denounce President Chen Shui-bian ended peacefully. Turnover was flat on Friday at T$83.4 billion (US $2.57 billion).
"The focus was on HTC and its sharp gains fuelled buying among other cellphone shares," said Alvin Teng, assistant research manager at SinoPac Securities.
Solid fundamentals pushed High Tech Computer Corp (HTC), the market's most actively traded issue by turnover, up the daily 7 percent limit to an all-time high on Monday.
The bellwether electronics sub-index jumped 1.27 percent, taking some comfort from gains in US counterparts on Friday. The financial sector finished up 0.22 percent.
Despite the day's rebound, the TAIEX had zig-zagged lower since January as investors left the market after a strong rally. Adding to nerves was Chen's move to fan tensions with China by announcing a plan to scrap a unification body in February.
Concerns over the slow sales season still exist and some analysts say selling pressure could emerge when the index climbs above the monthly moving average about 6,570 points.
Besides HTC, other mobile phone-related issues were major winners amid robust consumer demand.
Arima Communication Corp shot up 6.43 percent and Epistar Corp, a producer of LED (light emitting diode) chips for mobile phone displays, rose the daily limit.
VIA Technologies Inc also surged the daily 7 percent maximum after a local media report said the firm had received orders from clients in Japan and Europe. VIA displayed its chipsets for new portable computers at the CeBIT trade show.
United Microelectronics Corp (UMC), the world's number-two contract chip maker, rose 1.31 percent and microchip packager Advanced Semiconductor Engineering Inc(ASE) jumped 5.05 percent. UMC and ASE were the market's two most active stocks by volume.
But TSMC, UMC's larger rival, finished flat after Friday's gains that were fuelled by its solid February sales.
Investors also shunned select financial shares as they saw little relief from growing consumer bad loans.
Taishin Financial, Taiwan's top cash card issuer, lost 0.55 percent and rival Chinatrust Financial fell 0.61 percent.