Nikkei up 1.4 pct as tech, chip shares gain after Intel

(Adds comment, stocks, details)

By Aiko Hayashi

TOKYO, April 16 (Reuters) - Japan's Nikkei stock average rose 1.4 percent on Wednesday, boosted by chip-related shares such as Advantest Corp (6857.T) and other high-tech exporters on optimism about their profitability after Intel Corp (INTC.O) affirmed its profit-margin target for 2008.

Financial shares, including top lender Mitsubishi UFJ Financial Group (8306.T), picked up steam after stronger-than-expected quarterly results at several U.S. regional banks boosted stocks of financial companies there.

JVC 6792.T shot up more than 6 percent after a source with direct knowledge of the matter said on Wednesday that the struggling consumer electronics maker is considering drastically scaling back its home-use LCD TV operations in Japan. [ID:nTKU003218]

"Investors are returning to Japanese high-tech companies as Intel's earnings indicated that industry-wide demand for semiconductors for PCs hasn't dropped despite the worsening economic outlook," said Kazuhiro Takahashi, a general manager of the equity marketing department at Daiwa Securities SMBC.

Intel on Tuesday affirmed its profit-margin target for 2008, reassuring investors worried about falling memory chip prices and the impact of a weak U.S. economy, sending its stock up 8 percent. [ID:nN15200824]

"I expect gains to be limited as the market awaits a series of earnings overnight, though the Nikkei could reach the 13,300 level if other Asian markets move higher in the afternoon," said Takahashi.

The benchmark Nikkei average .N225 added 184.04 points to end the morning at 13,174.62, after closing up 0.6 percent on Tuesday.

The broader TOPIX index climbed 1.4 percent or 17.59 points to 1,273.56.

The rocky ride for the U.S. stock market is expected to continue this week, with earnings reports due from Merrill Lynch MER.N, Citigroup (C.N) and other large banks and financial services companies, as well as reams of economic data. First up is JPMorgan Chase (JPM.N), which reports earnings on Wednesday.

"The results from the U.S. regional banks came as a surprise and provided some relief in the market as investors had feared a scenario where regional banks also started collapsing," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

INTEL EFFECT

Advantest, the world's largest maker of microchip testers, gained 4 percent to 2,850 yen and chip gear maker Tokyo Electron Ltd (8035.T) jumped 4.8 percent to 6,280 yen.

Shinko Electric (6967.T), which supplies plastic laminate substrates and heat spreaders to Intel, surged 11.2 percent to 1,346 yen, while Ibiden Co (4062.T), which supplies chip packages to Intel, shot up 10.1 percent to 4,460 yen.

Other high-tech exporters also rose, with Canon Inc (7751.T) up 4.1 percent at 4,780 yen and Sony Corp (6758.T) rising 3.2 percent to 4,180 yen.