UPDATE 1-TSMC Q1 sales beat forecasts; more gains ahead

* March sales T$30.82 bln vs T$13.62 bln year ago

* Q1 sales beat market and own forecasts

* Stock up 0.64 pct, outperforming big board
(Recasts with analyst comments and details)

By Baker Li

TAIPEI, April 9 (BestGrowthStock) – Top contract chipmaker TSMC
(2330.TW: ) wrapped up the first quarter with strong March sales,
showing another evidance that major technology exporters in Asia
are benefiting from a sustained pickup in demand globally.

TSMC (TSM.N: ) and No.2 chip foundry UMC (2303.TW: ) have said
they would boost capital spending significantly this year to tap
demand for new computers, cellphones and flat-screen TVs that
require more powerful microchips.

But analysts say a wider customer base and early adoption of
more advanced technology would help TSMC yield higher profit
margins than UMC and other smaller rivals in the coming months.

“Second quarter should be very good and inventory is still
healthy, so we are not concerned too much about the second half,”
said Nomura analyst Rick Hsu.

“We are bullish on TSMC and UMC shares,” said Hsu, who put
“buy” rating on the two stocks.

Both TSMC and UMC are set to report first-quarter earnings
and give guidance for the second quarter in late April. The two
Taiwan companies supply chips to fabless chip companies and other
major chipmakers in the United States and Europe.

Investors chased TSMC shares in Taiwan ahead of the results,
pushing the stock up 0.64 percent on Friday. The main TAIEX share
index (.TWII: ) edged up 0.43 percent.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), which
counts Texas Instruments (TXN.N: ) and Nvidia (NVDA.O: ) among major
clients, had unconsolidated sales of T$30.82 billion ($975
million) last month, the company said.

That was more than doubled from a year ago and up 5.6 percent
from February, even though a strong earthquake in Taiwan caused
minor losses in early March. [ID:nTOE62302V]

A day earlier, UMC also reported a more than doubling in
March sales on Thursday. [ID:nTOE63703U]

(For a graphic on TSMC/UMC combined sales, click
http://graphics.thomsonreuters.com/10/04/TW_TSMUMC0410.gif)

January-March consolidated sales totalled T$92.187 billion,
up 133 percent from the year-ago period, beating TSMC’s own
forecast of between T$89-91 billion made in late January.

That was also higher than market expectations of T$91.4
billion, according to Thomson Reuters I/B/E/S.

Stock Market News

(US$1=T$31.6)
(Reporting by Baker Li, Editing by Jonathan Standing)

UPDATE 1-TSMC Q1 sales beat forecasts; more gains ahead