UPDATE 1-TSMC to hire 30pct more R&D engineers in 2009

* TSMC steps up hiring to move up technology ladder

* R&D costs as percentage of revenue to climb in 2009

* No plans to set up production facilities in China (Adds details, quotes)

By Baker Li

HSINCHU, Taiwan, June 18 (Reuters) - TSMC (2330.TW) (TSM.N), the world's biggest contract chipmaker, on Thursday said it intends to hire about 30 percent more R&D engineers as part of its effort to move up the technology ladder. Jason Chen, a company vice-president in charge of global sales and marketing, told a TSMC technology symposium the company curerently has 1,200 engineers carrying out research and design work on the company's manufacturing processes.

"There has been no slowdown in our research efforts despite the economic slowdown, and we'll continue to push forward on that front," said Chen.

He also said the company would hire 15 percent more engineers for design technology work this year, adding to its existing 600 headcount developing new technologies for TSMC clients.

Research and development costs as a percentage of revenue would climb this year from 2008, TSMC Chairman and Chief Executive Morris Chang told reporters during the symposium, but did not give details.

Chang's comments come as the company says it will venture into other businesses outside its core foundry work, and targets revenue of $2 billion by 2018. [ID:nTP279120]

He said the company had no plans to set up production facilities in China in the short term, even after Taiwan's government partially lifted a ban prohibiting certain companies including TSMC from setting up facilities on the mainland.

TSMC was the only foundry out of the world's top four to record a profit in the first quarter, when earnings at smaller rivals UMC (2303.TW) (UMC.N), Chartered Semiconductor (CSMF.SI) and SMIC (0981.HK) were in the red.

At 0259 GMT, TSMC shares were up 1.15 percent, outperforming a 0.37 percent advance by the benchmark TAIEX share index.

(US$1=T$32.9) (Editing by Chris Lewis)