UPDATE 2-Toshiba chips turn profit, aims to up outlook

* Chips earn Y5.2 bln vs 29.3 bln loss prev yr on cost cuts

* Aims to push up annual oper profit outlook by Y33 bln

* H1 social infrastructure profit at record high

* Tokyo Electron ups outlook on cost-cutting chip machines

* Shares close up 3.7 pct prior to announcement (Adds outlook comment, Tokyo Electron result)

TOKYO, Oct 30 (Reuters) - Toshiba Corp (6502.T), Japan's biggest chipmaker, said its semiconductor operations sprang back to a quarterly profit on cost cuts and more stable prices, and it said it aimed to lift its annual outlook.

Toshiba, the world's No.2 maker of NAND flash memory after Samsung Electronics Co (005930.KS), is eyeing stronger demand for the chips used in Apple Inc's (AAPL.O) iPhone, and for its system chips, used in Sony Corp's (6758.T) PlayStation3 game console.

But while its first-half earnings beat its target, the company, which entered a long-term chip supply deal with Apple in July, kept its operating profit forecast for the full year to next March at 100 billion yen ($1.1 billion).

"This does not mean that we have revised down our second-half earnings plan," Senior Executive Vice President Fumio Muraoka told reporters at a news conference. "We are keeping our original second-half plan intact."

That would lift Toshiba's internal operating profit target to 133 billion yen.

Toshiba, which is slowly shifting its focus away from volatile chips to stabler revenues in its power systems business, also maintained its forecast for a 150 billion yen profit in its social infrastructure segment.

That is even though that segment earned a record first-half high.

The owner of U.S. nuclear firm Westinghouse now aims to cut 400 billion yen in costs, up from an original plan for 330 billion yen. It is seeking to shore up its power systems operations, bidding for French nuclear group Areva's CEPFi.PA power transmission unit and also building a new lithium-ion battery plant.

Toshiba, which raised $5 billion earlier this year, reported its first operating profit in four quarters of 40.3 billion yen, up from 4.4 billion yen a year earlier, with its microchip operations swinging to a profit.

Toshiba said earlier this week it expected to make an operating profit of 39.6 billion yen, ahead of forecasts thanks to faster results from cost-cuts, as it shifts to more advanced and smaller chip processes.

Chip equipment supplier Tokyo Electron (8035.T) revised up its full-year earnings outlook to a smaller operating loss of 35 billion yen, from a previously stated 57 billion yen loss and above the consensus estimate for a 40 billion yen loss by 19 analysts polled.

Tokyo Electron, the world's second-biggest maker of machines used to make semiconductors, cited higher demand for machines that squeeze more circuitry onto each sliver of silicon.

Such devices lower per-chip costs, while they raise output.

Shares in Toshiba closed up 3.7 while Tokyo Electron rose 3.2 percent ahead of the announcement, outperforming a 2.1 percent rise in Tokyo's electrical machinery sub-index .IELEC.T. ($1=91.18 Yen) (Reporting by Mayumi Negishi; Editing by Lincoln Feast)