TSMC raises Q1 expectations on strong demand for mobile processors

Taiwan Semiconductor Manufacturing Co, the world's leading contract microchip maker, on Wednesday raised its first-quarter guidance buoyed by robust demand for sophisticated chips used in smartphones and tablets.

TSMC said revenue, gross profit margin and operating profit margin in the three months to March are all expected to exceed the upper end of the previous guidance issued in January.

(Also see: Samsung to continue to produce Apple's A8 chips alongside TSMC: Report)

First-quarter revenue is expected to be TWD 147 billion ($4.85 billion), compared with the previous guidance range of TWD 136 billion - TWD 138 billion.

The updated target revenue would mark a rise of 10.7 percent from the same period of 2013 when it posted Tw$132.76 billion in revenue.

"The upside to the first quarter guidance comes mainly from the increases in demand for our 28-nanometer wafers and from customers' active restocking of their inventory," chief financial officer Lora Ho said in a statement.

"The first quarter upside is perhaps a good prelude to an already anticipated strong year."

(Also see: TSMC making Apple A8 processor for iPhone 6: Report)

The company now also expects its gross profit margin for the first quarter to grow to 47 percent up from previous guidance for 44.5 percent to 46.5 percent and its operating profit margin to rise to 35 percent, up from 32-34 percent.

TSMC declined to comment on recent reports in local media that it is producing chips for Apple's next iPhone.

(Also see: Apple signs chip-manufacturing deal with TSMC: Report)