(Recasts; adds outlook, company comment, context)
* Q1 profit T$47.9 bln vs T$43.2 bln analyst view
* Targets Q2 revenue of T$180 bln to T$183 bln
* Shares fall 0.8 pct before release; benchmark up 0.2 pct
By Michael Gold
TAIPEI, April 14 Taiwan Semiconductor
Manufacturing Co Ltd (TSMC) targets record revenue in
the second quarter as more of the company's chips are installed
in high-end smartphones to power increasingly complex features.
The world's largest contract chip producer also aims to grab
market share from rivals such as Samsung Electronics Co Ltd
and Intel Corp on demand from phone makers,
whose custom pushed first-quarter earnings up by a fifth.
Smartphone sales grew 36 percent in the fourth quarter,
showed the latest data from researcher Gartner, with low-end
phones in emerging markets constituting the centre of growth
while sales of high-end phones in advanced economies slow.
Yet high-end phones equipped with Long-Term Evolution (LTE)
wireless technology will drive TSMC's revenue several percentage
points beyond the overall industry, as will phones with advanced
features such as image and fingerprint sensors which require
more chips, said co-Chief Executive Mark Liu on Thursday.
"Demand in smartphones appears healthier than we expected
last quarter," Liu said at an earnings briefing for analysts
alongside fellow CEO C.C. Wei.
TSMC reported its eighth straight quarter of profit growth
in January-March at T$47.9 billion ($1.59 billion), compared
with the T$43.2 billion mean estimate of 19 analysts polled by
The company previously reported first-quarter revenue of
T$148.22 billion, 11.7 percent more than a year earlier, and 7.3
percent more than forecast in January.
"We enjoyed strong orders across all segments," Liu said at
TSMC projected second-quarter revenue in a range of T$180
billion to T$183 billion. The company declined to disclose its
current or targeted market share for high-end smartphone chips.
Shares of TSMC have risen about 15 percent since the start
of the year versus 2.8 percent in the Taiwan SE Weighted Index
. They closed 0.8 percent lower ahead of the earnings
release, compared with a 0.2 percent rise in the benchmark.
Asia's 10th biggest company by market value has been able to
consistently profit thanks to the spread of smartphones such as
those from Apple Inc, industry watchers say, as well as
its ability to produce a high degree of defect-free chips.
The company recorded an operating margin of 35.4 percent in
the first quarter and projected its second-quarter margin to be
in the range of 36.5 percent to 38.5 percent.
Chief financial officer Lora Ho also confirmed TSMC's
forecast of double-digit profit growth this year as its
world-first 20-nanometre chip-making technology begins to
supplant the 28-nanometre standard.
The technology, which entered production in the first
quarter, allows for increased power and efficiency by packing
more transistors onto each chip. Intel plans to introduce
14-nanometre technology in the second half of this year.
"Our 20 nanometre ramp-up is one of the largest
mobilizations in semiconductor history," said co-CEO Wei.
TSMC promises further efficiency - and wider margins - with
larger 18-inch silicon wafers, which will allow for more chips
per wafer. The company declined to provide a timetable for
production because of a lack of mature equipment from suppliers.
($1 = 30.1440 Taiwan Dollars)
(Editing by Christopher Cushing)