UPDATE 1-Taiwan's Compal upbeat on Q2,sees component shortage

* Compal revises upwards its Q2 shipment target

* Revises upwards global PC shipment forecast

* Sees gross profit margin flat in H2 from H1

* Company shares have far outpaced main board this year

(Adds comments, details throughout)

By Kelvin Soh

TAIPEI, May 7 (Reuters) - Compal Electronics (2324.TW), the world's No.2 contract laptop PC maker, on Thursday revised upwards its shipment forecast for the second quarter, in the latest sign of returning confidence and a further thaw in the sector. A key supplier to top PC brands such as Acer (2353.TW), HP (HPQ.N) and Dell (DELL.O), Compal now expects second-quarter shipments to grow 15-20 percent from the preceding quarter, higher than its previous forecast of 15 percent.

"We're now looking at 15 percent as the low end of our target for the quarter," company President Ray Chen said during an investor conference.

"Demand is picking up, and we are seeing a component shortage, especially with LCD screens. Prices of these components are climbing and, in some cases, rising rather rapidly."

Despite the rise in component prices, Chen said he expected gross profit margin at the company to remain flat in the second half of 2009 from the year's first six months as it reined in operational costs.

"We think gross profit margin in Q2 will be flat from Q1, and the second half should be flat from Q2. We've been able to control costs effectively, and intend to do so for the rest of the year."

Last month, the company said it shipped 6.3 million laptop PCs in the first quarter of this year, and reported a T$2.8 billion ($84.49 million) net profit for the same period. [ID:nTPF001329]

Compal and its larger rival Quanta (2382.TW) manufacture more than half of all the world's laptop PCs, and their shipment numbers are closely monitored as a barometer of global demand for personal computers.

Chen also said he expected global notebook and netbook PC shipments to hit about 145 million-150 million units this year, higher than its previous forecast of 145 million, with the Microsoft's (MSFT.O) launch of Windows 7 being a major push factor.

"Windows 7 should be a very positive thing for the PC industry when it is launched in the fourth quarter," Chen said. "It's a vast improvement over Vista and we expect it to help stimulate spending when it's out."

Compal's outlook is in line with data tracking firm IDC's forecast for notebook PC shipments to hit 148 million units this year.

Many of Taiwan's tech companies have also benefitted from China's $600 billion stimulus package to boost its economy, which is single-handedly driving a recovery on the island's technology sector. [ID:nTP124531]

Investors have been relatively upbeat on Compal so far this year, with its shares having climbed more than 80 percent to date, compared with a 44 percent advance on the benchmark TAIEX share index.

(Editing by Chris Lewis)