TSMC sees sales surge last month

Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's biggest maker of chips for other companies, said April sales surged 44.8 percent as it increased production of more advanced chips that sell for higher prices.

Sales rose to NT$13.37 billion (US$387 million) from NT$9.23 billion a year ago, the company said in a statement. That was up from NT$12.3 billion in March. Second-quarter sales will show a "steady" increase from the first, the company said, without providing details.

Capacity use will rise to 80 percent in the second quarter from 67 percent in the first quarter, TSMC said. Shipments are forecast to climb a fifth.

"A 20 percent increase in the second quarter is higher than we expected," said Daniel Heyler, an analyst with Merrill Lynch & Co, who was forecasting an increase of about 15 percent.

TSMC Chairman Morris Chang (張忠謀) said earlier he expects sales to rise by as much as 30 percent this year, quadruple the rate forecast for the global chip industry which began its slide in the first quarter last year.

The industry is rebounding from its worst-ever year, when a decline in demand for mobile phones, computers and other electronics clipped orders for the chips that run them. The industry began its slide in the second quarter of last year.

TSMC said 53 percent of sales in the first quarter were from chips made with technology for so-called 0.18-micron and smaller transistors that power portable products like cellphones and laptop computers. That compares with 45 percent in the prior quarter.

The company also said chips made with so-called 0.13 micron transistors, the world's most advanced technology, accounted for 1 percent of sales in the first quarter, the first time the company gave figures on that product.

Intel Corp, the world's biggest chipmaker, and TSMC are the only companies that have said they're selling chips made with the new technology.

TSMC said it plans to spend about US$2.5 billion for expansion this year, mainly to increase production of its most advanced chips. The company is "in a struggle" to increase capacity for chips made with its best technology, which will account for 47 percent of output by the end of the year, TSMC President Rick Tsai (蔡力行) said at a technology conference in Hsinchu.

"I think we will still be able to satisfy our customers' demand," Tsai said.

The foundry part of the industry will almost double to 40 percent by 2010 from about 21 percent now, Tsai said in his presentation.

Made-to-order chipmakers such as TSMC and United Microelectronics Corp (UMC, 聯電), its nearest rival, are referred to as foundries in industry terminology.

UMC said that its April sales fell 9.9 percent from a year earlier.