10-17-13 2:13 AM EDT | Email Article
   By Aries Poon 

TAIPEI--Taiwan Semiconductor Manufacturing Co. (2330.TW) Thursday posted record-high net profit and revenues for the third quarter, driven by demand for high-performance chips from smartphone and tablet makers.

Demand for smaller and more powerful chips, which help make mobile devices sleeker and more energy efficient, has been propelling TSMC's earnings and revenue higher since the second quarter of 2012. But the company and analysts have said such growth is likely to slow, at least in the fourth quarter and the next, because of a benign global economic recovery and a maturing smartphone market--particularly toward the higher end.

TSMC, the world's largest contract chip manufacturer by revenue, said third-quarter net profit rose 5.2% from a year earlier to $51.95 billion New Taiwan dollars ($1.77 billion) from NT$49.38 billion. TSMC's net profit was above an average NT$51.71 billion forecast of 21 analysts polled by ThomsonReuters.

Third-quarter revenue rose 15% to a record-high NT$162.58 billion from NT$141.38 billion a year earlier. Gross margin was 48.5% in the third quarter, compared with its guidance of 47%-49%.

TSMC Chairman Morris Chang had in July warned of a revenue decline in the fourth quarter as global inventory piles up. Some analysts said some of TSMC's clients have recently asked for a discount, or they would cut orders.

The average price of a smartphone worldwide dropped to $375 from $450 since the beginning of 2012, IDC estimated in July. In the third quarter, TSMC derived 53% of revenue from making chips for smartphones and tablets.


Write to Aries Poon at aries.poon@wsj.com


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(END) Dow Jones Newswires

October 17, 2013 02:13 ET (06:13 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
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Morningstar - 2013/10/17 - TSMC 3Q Net Profit at Record NT$51.95 Billion, up 5.2% on Year
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