Taiwan's TSMC books 65 pct rise in Q1 net profit, beats estimates

TAIPEI (Reuters) - Taiwan Semiconductor Manufacturing Co Ltd (TSMC) <2330.TW> reported a 65 percent rise in first-quarter net profit on Thursday, beating analyst estimates, boosted by strong sales of iPhones from main client Apple Inc .

The world's largest contract chip manufacturer booked T$79 billion ($2.54 billion) for January-March, compared with the T$77.8 billion average estimate of 22 analysts polled by Reuters.

The company also reported a quarterly revenue rise of 49.8 percent, as devices from watches to washing machines require more chips.

Shares of TSMC closed up 2.8 percent ahead of the earnings release, versus a 1.2 percent rise in the overall TAIEX <.TWII> index.

Company-watchers are skittish about the firm's future as competition intensifies to produce the smallest, most energy-efficient chips against rivals Samsung Electronics Co Ltd <005930.KS> and Intel Corp .

Most agree TSMC lost orders to Samsung to produce chips for Apple's next-generation iPhone, likely due out this year. Estimates for TSMC's share in the next iteration of the hot-selling gadget range from 30 percent to 50 percent.

Samsung also last week said it opted for its own chips for its latest flagship phone over chips from Qualcomm Inc , which contracts a large share of its production to TSMC.

Declining prices for smartphones worldwide may also drive handset makers to contract smaller players Semiconductor Manufacturing International Corp <0981.HK> and hometown rival United Microelectronics Corp <2303.TW> who offer more competitive prices for less-advanced technology, analysts say.

(Editing by Christopher Cushing)

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