Taiwan Semiconductor profit up 21% in Q1

Taiwan Semiconductor Manufacturing Co said Thursday its first-quarter net profit rose 21 percent year-on-year, boosted by stronger than expected demand for chips used in smartphones and tablets. The world's biggest contract chip maker said net profit rose to Tw$47.87 billion ($1.6 billion) in the January-March period, while revenue grew 11.6 percent to Tw$148.22 billion from a year earlier. Net profit and revenue rose 6.8 percent and 1.7 percent, respectively, from the fourth quarter last year, the company said in a statement. The figures exceeded a forecast TSMC made last month when raising its first-quarter guidance on robust demand for sophisticated chips used in mobile devices. The company had expected first-quarter revenue of around Tw$147 billion. "In the first quarter, we saw much stronger demand for our wafers across all segments but more pronounced in mobile-related applications than we had initially predicted," said chief financial officer Lora Ho. TSMC said mobile device makers have turned more positive in their outlook this year, driven by better-than-expected business in the last quarter of 2013. They were actively restocking inventory before new product launches. The company expects a strong rebound in demand to continue in the second quarter, with estimated revenue of around Tw$180-Tw$183 billion while gross profit margin is expected at 47.5-49.5 percent and operating profit margin at 36.5-38.5 percent. TSMC is also expected to get a boost from supplying the "A8" chips to be used in Apple's next iPhone starting in the second or third quarter, according to Dow Jones Newswires.