| TAIPEI, April 10
TAIPEI, April 10 Sales at Taiwan's contract
chipmakers grew in the first three months of this year, though
destocking by customers was less rapid than had been forecast.
January-March sales at Taiwan Semiconductor Manufacturing Co
Ltd (TSMC) and United Microelectronics Corp
were up from both the previous quarter and the same period in
2012, as demand for hi-tech chips used in smartphones and
tablets continued to grow.
TSMC, the world's top contract chipmaker, supplies Qualcomm
Inc, Texas Instruments Inc and Nvidia Corp
. Smaller rival UMC also makes chips for Texas
In turn, these firms sell chips to comsumer electronics
companies like Apple Inc, Samsung Electronics
and HTC Corp.
"Inventory correction in the first quarter was not as
serious as the market expected, so restocking in the
second-quarter will not be as strong," said KGI Securities
analyst Ricky Liu, who forecast TSMC's second-quarter sales
growth at 6-8 percent, compared with a consensus forecast of
10-15 percent given by analysts in the fourth quarter.
TSMC Chairman Morris Chang has said he expects a rebound in
revenue from April, and has predicted full-year revenue growth
of 15-20 percent.
TSMC said sales in the first quarter were T$132.7 billion
($4.42 billion), beating the T$127-T$129 billion guidance the
company gave in January.
The figure was slightly higher than the T$131.3 billion
recorded in the fourth quarter of last year, and 25.7 percent
higher than in the first quarter of 2012.
During the same period, UMC posted a 6.5 percent rise
compared with the previous quarter.
TSMC and UMC will announce first-quarter earnings on April
18 and May 8 respectively.
Though demand is strong, earnings at contract chipmakers
including non-Taiwanese rivals Samsung and GlobalFoundries
Singapore Pte Ltd tend to be limited by heavy spending
as competition intensifies.
"Higher costs will offset revenue growth and cap margin
expansion," said Warren Lau, an analyst of Kim Eng Securities
based in Hong Kong, in a report.
"Because of the heavy investment in capital expenditure,
depreciation costs are projected to increase by 20-25 percent
YoY in 2013, accounting for at least 25-26 percent of revenue."
Shares of TSMC are up 1.3 percent since the beginning of the
year, while shares of UMC have slipped 6 percent. The broader
Taiwanese market has risen 1 percent.