Second-quarter net income climbed 65 percent to NT$40.3 billion (US$1.3 billion), from NT$24.4 billion a year earlier, the Hsinchu, Taiwan-based company said in a statement today. The average of 19 analyst estimates compiled by Bloomberg was for profit of NT$36.5 billion.

Taiwan Semiconductor joins Intel Corp. and Samsung Electronics Co., the two largest chipmakers, in posting record earnings from semiconductors as the global economy rebounds and consumers in emerging markets buy more electronic devices. TSMC, an industry bellwether because it supplies components used by companies including Apple Inc. and Sony Corp., increased its equipment budget to US$5.9 billion after chip designers raised their forecasts.

"Shipments jumped in the second quarter, indicating strong end-market demand for consumer electronics during the traditional low season," Amigo Liu, who rates TSMC "outperform" at KGI Securities Co. in Taipei wrote in a report today before the announcement. "In the third quarter, shipments will continue to grow due to rising orders from major international handset manufacturers."

The chipmaker's Taipei-traded shares closed unchanged at NT$63 yesterday and have lost 2.3 percent this year compared with a 4.8 percent decline in the benchmark Taiex index. TSMC is the largest component on the gauge. Shares of its nearest rival, United Microelectronics Corp., have dropped 16 percent over the same period.

Taiwan Semiconductor will spend US$5.8 billion on equipment for its chip-manufacturing business, and a further US$100 million on new businesses, including solar power and light-emitting diodes, Chairman and Chief Executive Officer Morris Chang said at an investors' conference today in Taipei. TSMC in January forecast spending of US$4.8 billion for this year.

"We have a responsibility to our customers to do our utmost to respond to their demand," Chang said yesterday. "Their demand for this year, and their demand for next year, have both risen since January."

Chang, who founded the company 23 years ago, on June 15 raised his forecast for global chip-industry sales to 30 percent, citing stronger demand from "fast-growing developing economies." That was the second upward revision this year. Chang, 79, projected 18 percent growth in January.

Intel, the world's biggest chipmaker, on July 13 posted US$2.9 billion profit for the second quarter and forecast third- quarter sales that surpassed analyst estimates as corporate spending helps spur demand for chips that power notebook and server computers. The company said in a press statement it was its best quarterly result.

Samsung, the No. 2 chipmaker, posted record operating income of 5 trillion won (US$4.2 billion) for last quarter, driven by demand for memory chips used in Apple's iPhone, as well as computers and digital cameras.

HTC Corp., the world's largest maker of phones using Google Inc. and Microsoft Corp. operating systems, today forecast record third-quarter sales of NT$70 billion as demand for smartphones that connect to the Internet surge. Mobile phone shipments may increase 11 percent globally this year, according to research company IDC.