* Q1 profit down from record Q4, strong domestic currency
* TSMC sees continued strength in Taiwan dollar in Q2
* TSMC not participating in talks to buy Toshiba's chip
(Adds further comments)
By J.R. Wu and Jess Macy Yu
TAIPEI, April 13 Taiwan Semiconductor
Manufacturing Co, the world's largest contract
chipmaker and a major supplier to Apple Inc, said its
quarterly profits were hit by a strong local currency and
cautioned it expected this trend to continue.
Taiwan's exporters have been hurt by the strong currency,
which is the third best performing currency in Asia so far this
year, just behind the South Korean won and the Indian rupee.
TSMC expects the Taiwan dollar to appreciate by 2.1
percent in the second quarter, dragging its revenue down by the
same rate over the period and reducing its gross margin and
operating margin by about 85 basis points, Chief Financial
Officer Lora Ho said at an earnings conference on Thursday.
TSMC's revenue is fully denominated in U.S. dollars, but for
reporting purposes it is quoted in Taiwan dollars, Ho said. This
means an appreciation of the latter against the greenback has a
one-to-one correlation to revenue, she said.
Regarding the possibility of the company bidding for Toshiba
Corp's memory chip business, TSMC said it was not
participating in talks after reviewing it with interest.
"We did not find a clear synergy," Ho said.
In early March, a TSMC spokeswoman said the company was
looking at the troubled Japanese conglomerate's chip business
but had yet to make any decision on whether to bid.
For the first quarter ended March, TSMC's profit rose 35.3
percent, below estimates, after revenue missed guidance.
Net profit hit T$87.63 billion ($2.90 billion) for the
quarter, traditionally a weak period for the tech sector after
the year-end sales rush. That missed the T$88.26 billion median
analyst estimate in a Thomson Reuters/Eikon poll.
The result was also down from the T$100.2 billion of the
fourth quarter of last year, which was a quarterly record.
Gross profit margin was 51.9 percent while its operating
margin was 40.8 percent.
Earlier this week, TSMC said first-quarter revenue, at
T$233.91 billion, missed the lower end of its guidance of
between T$236 billion and T$239 billion given in January due to
a strong Taiwan dollar.
($1 = 30.2260 Taiwan dollars)
(Editing by Christopher Cushing and Himani Sarkar)