UPDATE 1-UMC's April sales rise 4.8 pct on chip recovery
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TAIPEI, May 8 (Reuters) - UMC (2303.TW), the world's second-largest contract chip maker, posted a 4.8 percent annual rise in April sales on Thursday, showing a recovery from the chip sector's downturn in the first quarter.
After a weak first quarter, UMC said last week it forecast wafer shipments will grow 10 percent from the first quarter on expectations of rising demand for mobile phones, though average selling prices could drop 2 percent in the same period.
Stronger demand would push UMC's gross profit margin to about 20 percent in the current quarter from the first quarter's 14.9 percent.
"We reckon there is a good chance the higher margins can be sustained," Credit Suisse analyst Randy Abrams wrote in a recent report. He raised his 2008 and 2009 earnings per share forecasts by 6-9 percent to reflect the stronger margin.
United Microelectronics Corp (UMC) (UMC.N) had sales of T$8.521 billion ($277 million) last month, higher than T$8.131 billion a year earlier and T$8.498 billion in March.
Sector leader Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW) (TSM.N) is set to report April sales on Friday.
TSMC is also forecasting flat to slightly higher second quarter sales from the first quarter.
Analysts say the launch of new personal computers, mobile phones and flat-screen TVs could help TSMC and UMC extend growth momentum in the second half of the year.
To see a graphic of UMC's sales/recent earnings, click on: here UMC reported the sales results after trading closed on the Taipei stock market on Thursday. UMC shares fell 1.33 percent while TSMC dropped 1.03 percent, both underperforming the main TAIEX's 0.67 percent slide. (US$1=T$30.5) (Reporting by Doug Young, Writing by Baker Li, Editing by Anne Marie Roantree)
