Demand for chips is expected to remain strong The world’s two largest contract chip makers, Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC), saw their first-quarter sales rise sharply, reflecting strong demand for chips.TSMC’s first-quarter sales totalled NT$77.3 billion (US$2.4 billion as of March 31, the last day of the period being reported), up 39 percent from the same period last year. Rival chip maker UMC saw its sales rise 20 percent during the quarter, to NT$24.4 billion.TSMC’s sales narrowly beat its first-quarter forecast, which was for sales of between NY$73 billion and NT$76 billion. The growth resulted from increased wafer shipments, the company said. Both companies’ figures are based on sales results reported each month under Taiwanese rules for public companies. The full first-quarter figures will be reported later this month.Demand for chips has been generally strong since the second half of last year, said Betty Lin, a semiconductor analyst at IDC Asia-Pacific, in Taipei. “We have seen this trend since the late third and fourth quarter last year,” she said, noting that chip inventory levels appeared to be low.Demand for chips is expected to remain strong. There is currently a shortage of production capacity for chips made using 200-millimeter (8-inch) wafers and supply is beginning to tighten for 300-millimeter capacity, Lin said. Technology Industry