Taiwan Semiconductor may say Q4 profit rose

Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's No. 1 supplier of made-to-order chips, may say fourth-quarter profit rose almost 10 percent as customers bought more chips made with technology few rivals offer.

Net income increased to NT$4.9 billion (US$142 million) from NT$4.5 billion a year ago, a Bloomberg survey of five analysts showed. Sales, based on monthly company reports, rose to NT$41.1 billion from NT$33.1 billion. The company will announce results tomorrow after 1:30pm.

Nvidia Corp, the world's biggest designer of computer-graphics chips, and its rivals increased orders with TSMC for its best production technology, analysts said.

Chips made with transistors that measure 0.13 micron in width cut production costs and fetch the highest profits.

"Orders from personal computer and communications chip customers have been strong," said Johnny Lin, an analyst with Yuanta Core Pacific Securities Co (元大京華證券). "Better-than-expected orders have sustained through December."

Nvidia, which cut third-quarter orders after sales lagged forecasts, expects to resume ``normal'' production with TSMC, Nvidia Chief Executive Officer Jen-Hsun Huang said last month. Huang didn't elaborate on the level of production Nvidia expects to reach.

TSMC, which had technical difficulties with its 0.13 micron manufacturing process, expected to solve those problems during the fourth quarter, Chairman Morris Chang (張忠謀) said in September.

The Taiwan Ratings Corp (中華信評), the local unit of Standard & Poor's, rates TSMC's long-term debt "twAA." The rating is the third-best of 19.

The company sold 36 percent of its production to computer-chip companies in the third quarter, compared with 29 percent for nearest rival United Microelectronics Corp (UMC, 聯電). TSMC benefited more than UMC from the stronger performance of its computer-related customers in the fourth quarter, analysts said.