TSMC Q4 profit beats forecasts, powered by 5G chip demand

Q4 profit T$116.035 bln vs T$111.41 bln analyst view

Q4 revenue up 10.6% from a year ago in US dollar terms

Adds details of results

TAIPEI, Jan 16 (Reuters) - Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, TSM.N, the world's largest contract chipmaker, posted a better-than-expected quarterly profit on strong demand for 5G chips.

TSMC, a proxy for global tech demand as its clients include Apple Inc AAPL.O, Qualcomm QCOM.O and Huawei Technologies HWT.UL, said October-December net profit rose 16.1% year-on-year to T$116.035 billion ($3.88 billion).

That compared with an average forecast of T$111.41 billion drawn from 19 analysts, Refinitiv data showed.

Revenue rose 10.6% to $10.39 billion, versus the company's estimate of $10.2 billion to $10.3 billion and an average $10.55 billion estimate from 21 analysts, according to Refinitiv data.

Rising demand for 5G smartphones and an upbeat outlook for new technologies including artificial intelligence will further drive sales of TSMC's high-performance chips, known as 7 nanometre, analysts said.

After shrinking for three consecutive years, the smartphone market is back on track to grow this year thanks to 5G smartphone demand. Industry tracker IDC sees global smartphone shipments topping 1.4 billion units in 2020, up 1.5% on year.

Investor sentiment should also get a boost from an initial trade deal agreed this week between the United States and China that is expected to defuse their 18-month trade war, which has weighed on the global economy and the tech industry.

Reflecting growing optimism for the tech sector, TSMC shares hit a record earlier this month after gaining more than 50% in 2019.

Prior to the earnings announcement on Thursday, shares in TSMC closed down 1.62%, versus a 0.21% fall in the wider market .TWII, valuing the company at nearly $295 billion, bigger than U.S. rival Intel Corp's INTC.O $256 billion.

($1 = 29.9230 Taiwan dollars)

(Reporting By Yimou Lee; Writing by Ben Blanchard; Editing by Himani Sarkar, Tom Hogue and Muralikumar Anantharaman)

((yimou.lee@thomsonreuters.com; +886-2-8729-5122;))

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