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TSMC Rises as Global Mobile Phone Demand Drives Chip Expansion

A visitor enters the Taiwan Semiconductor Manufacturing Co. (TSMC) headquarters in Hsinchu, Taiwan. Photographer: Maurice Tsai/Bloomberg
A visitor enters the Taiwan Semiconductor Manufacturing Co. (TSMC) headquarters in Hsinchu, Taiwan. Photographer: Maurice Tsai/Bloomberg

Jan. 17 (Bloomberg) -- Taiwan Semiconductor Manufacturing Co. expects full-year sales and profit to climb at least 10 percent this year as demand for mobile devices offsets higher depreciation costs. Its shares rose to the highest in more than two months in Taipei.

Average prices at the world’s largest custom maker of chips will rise “several percentage points” this year, driven by TSMC’s new manufacturing technologies, Morris Chang, chairman of the Hsinchu, Taiwan-based company, said yesterday.

TSMC, which gets about $13 in revenue from every high-end smartphone sold globally, is spending $27 billion over three years to boost capacity and improve technology as it forecasts 35 percent growth in the global smartphone and tablet market this year. The company forecast sales this quarter that missed estimates as clients continue to halt orders amid an inventory glut at the end of last year.

“TSMC is well-positioned in our view to capture the increasing smartphone silicon content in high-end and strong volume growth in mid/low-end,” Jeff Su, who expects the stock to outperform at Macquarie Group Ltd. in Taipei, wrote in a report after yesterday’s investor conference.

TSMC shares climbed 1.4 percent to NT$108.50 as of 9:14 a.m. in Taipei, the highest since Nov. 4. The New York-listed ADRs rose 3.4 percent overnight. Taiwan’s benchmark Taiex index, of which TSMC is the largest component, rose 0.1 percent.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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