UPDATE 2-TSMC's Q2 profit rises but cautious on Q3

jueves 31 de julio de 2008 09:58 CEST

(Recasts with quotes, Q3 guidance and details)

By Baker Li

TAIPEI, July 31 (Reuters) - TSMC (2330.TW: Cotización), the world's top contract chip maker, beat market expectations with a 13 percent rise in quarterly profit on rising chip sales, but forecast minimal sales growth and flat margins for the third quarter.

TSMC was the latest semiconductor company to express concerns over slower demand and analysts say chip inventories could swell if the global economy slows sharply and consumers cut back on sending on computers, mobile phones and other hi-tech goods.

A day after its key competitor, United Microelectronics Corp (UMC) (2303.TW: Cotización) (UMC.N: Cotización), flagged a flat third quarter, TSMC said on Thursday its third-quarter sales would rise about 4 percent from the second quarter -- in line with market expectations.

TSMC said its third-quarter gross profit margin should be 45-47 percent, versus 45.6 percent in the previous three months, with its operating profit margin coming in between 34-36 percent, versus the second quarter's 34.5 percent.

"They are facing risks if inventories built up for their clients," said Nigel Lee, who manages T$750 million ($24.5 million) for Taiwan's National Investment Trust.

"I have no doubt about their efforts to move up the tech ladder to further cut costs, but the big question is demand is going down now," said Lee, who has TSMC and UMC shares in his portfolios.

TSMC and UMC together control around two-thirds of the global foundry market and count Texas Instruments TXN.N as a major client.   Continuación...