UPDATE 1-Silicon Image posts surprise Q2 profit, shares rise

* Q2 adj EPS $0.03 vs est loss $0.03/shr

* Q2 rev $44.6 mln vs est $38 mln

* Sees Q3 rev $48 mln-$50 mln vs est $43.5 mln

* Shares rise 16 pct in extended trade

July 27 (Reuters) - Chipmaker Silicon Image Inc (SIMG.O) swung to a surprise quarterly profit on strong product sales and forecast third-quarter revenue above market estimates, sending its shares up 16 percent.

The company, whose chips are used in high-definition televisions, set-top boxes and Blu-ray players, forecast third-quarter revenue of $48 million to $50 million.

Analysts, on average, were looking for sales of $43.5 million for the period, according to Thomson Reuters I/B/E/S.

"We plan to launch new products targeted for the mobile market and we expect them to contribute to our revenue growth in 2011," Chief Executive Camillo Martino said in a statement.

For the second quarter, the company posted a net profit of $1.8 million, or $0.02 cents a share, compared with a net loss of $13.3 million, or 18 cents a share.

The results included a pre-tax restructuring expense of $7.1 million, the company said.

Excluding special items, the company earned 3 cents a share, beating estimates for a loss of 3 cents a share.

Revenue was $44.6 million, compared with analysts' estimates of $38 million. Product sales rose 30 percent to $38.4 million.

Shares of the Sunnyvale, California-based company were up 55 cents at $3.90 in extended trade. They closed at $3.35 Tuesday on Nasdaq. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Saumyadeb Chakrabarty)