TSMC Beats Own First Quarter Revenue Guidance

Taiwan Semiconductor Manufacturing (TSMC) on Friday reported slightly higher revenue in the first three months of this year than it had forecast, amid signs of sustained demand for gadgets, including laptop computers and smartphones.

The company's revenue for the first three months of the year reached NT$92.19 billion (US$2.92 billion), up 133 percent over the same time last year and beating the top end of its own forecast, which was NT$91 billion. The global chip industry bottomed out in the first quarter last year as the financial crisis hurt global trade.

TSMC is considered a technology industry bellwether for its size and the range of devices for which it makes chips. Its quarterly earnings reports are watched closely for signs of market health. The company is the world's largest contract chip maker, manufacturing chips for global companies such as Texas Instruments, Qualcomm and Nvidia.

TSMC's first quarter revenue was also higher than the fourth quarter of last year, NT$92.09 billion, which is noteworthy because chip sales typically slow down in the first quarter of every year. The fourth quarter is one of the strongest for chip makers due to sales of chips for the gadgets people buy as gifts for the holidays. Consumers usually take a break from new purchases in the first quarter.

Market researchers, including IDC, have credited strong first quarter chip sales to a global rebuilding of inventories in addition to continued strength in PC sales.

TSMC raised its forecast for chip market revenue growth this year to 22 percent from 18 percent previously due to strong demand, company chairman Morris Chang said at a speech a few weeks ago.

Taiwan's United Microelectronics (UMC), the third largest contract chip maker in the world, on Thursday reported that its revenue for the first three months of 2010 nearly tripled to NT$26.72 billion, up from NT$10.84 billion last year.

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