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TSMC upbeat on second-quarter revenue, sees strong mobile-related demand

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(Globalpost/GlobalPost)

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co Ltd on Thursday forecast quarterly revenue to grow as much as 17 percent from the prior three months, anticipating strong mobile-related demand for chips made with its cutting-edge technology.

The world's biggest contract chipmaker said it expects second-quarter revenue to rise to between T$154 billion (3.38 billion pounds)and T$156 billion from T$132.8 billion in the previous quarter.

TSMC has enjoyed robust demand for its chips made with 28-nanometre process technology, which can cram more computing power into smaller chips, as consumers shift to smartphones and tablets like Apple Inc's iPad and iPhone.

"We're encouraged by the Q2 business prospects," TSMC Chairman Morris Chang told an investor conference. "Both Q1 and Q2 are stronger than seasonal because mobile-related demand remains strong and our strong position in the 28-nanometre technology."

By contrast, Intel Corp, the world's largest chipmaker, on Tuesday said its quarterly revenue would likely decline as much as 8 percent and trimmed its 2013 capital spending plans as personal computer sales drop due to the growing popularity of tablets and smartphones.

TSMC is the top contract chipmaker with 50 percent of the market, followed by Global Foundries with 12 percent, according to research firm Gartner. Contract chipmakers manufacture chips for chip design companies.

As competitors vie to catch up in 28-nanometre production capacity, TSMC is investing to speed up development of more advanced process technology.

TSMC raised its 2013 capital spending plan to between $9.5 billion (6.2 billion pounds) and $10 billion, compared with around $9 billion originally expected at the beginning of the year and $8.3 billion spent last year.

Chang said some of the increased capital expenditure would be invested in 20-nanometre process and in 16-nanometre FinFET process technology. He added that he expected revenue from 28-nanometre to triple this year compared with 2012.

TSMC's clients include Qualcomm Inc, Texas Instruments Inc and Nvidia Corp. In turn, these firms sell chips to consumer electronics companies like South Korea's Samsung Electronics Co and Taiwan's HTC Corp as well as Apple.

Also on Thursday, TSMC said its net profit rose 18 percent to T$39.58 billion in its January-March first quarter, above the T$37.61 billion average estimate of 19 analysts polled by Thomson Reuters I/B/E/S.

The company last week reported a 26 percent increase in first-quarter sales, beating its own guidance issued in January.

Shares of TSMC have risen about 3 percent in the year to date compared to a 1 percent rise in the broader market. The stock closed nearly flat prior to the results announcement on Thursday.

(Reporting by Clare Jim; Editing by Chris Gallagher)

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