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TAIPEI, Apr 27 (Reuters) TSMC , the world's top contract chip maker, posted a better-than-expected 94 percent rise in quarterly profit as it recovers from last year's slump thanks to growing demand for consumer gadgets.

The semiconductor business slowed in the first months of the year after the year-end buying boom, but analysts say TSMC and rival UMC could boost profits this year on booming demand for mobile phones, game consoles and flat-screen TVs.

TSMC's net profit came to T$32.61 billion (US$1 billion) for the quarter ended March 31, up from T$16.82 billion a year ago, but falling short of a record T$33.9 billion in the final quarter of 2005.

First-quarter revenues for Taiwan Semiconductor Manufacturing Co. (TSMC) were T$77.29 billion thanks to stronger-than-expected demand in certain product segments, it said in a statement issued before an investor conference.

The market had expected TSMC to earn T$28.39 billion, according to eight analysts polled by Reuters Estimates.

By comparison, UMC's operating profit fell 72 percent in the first quarter although its net earnings jumped eight-fold to T$12.29 billion on stake sales of holdings in affiliates.

TSMC announced the quarterly profits after the market closed in Taipei. Its ordinary shares fell 2.61 percent to T$67.2, while the main TAIEX dropped 0.46 percent.

TSMC shares surged to their highest close in nearly six years last Thursday. The stock has risen around 11 percent so far this year, beating the TAIEX's 9 percent gain. UMC shares closed at an eight-month high on Friday and are up 22 percent this year.

Both TSMC and UMC count Texas Instruments Inc. (TI), the world's top supplier of mobile phone chips, as major clients. TI posted a quarterly profit that beat estimates, thanks to strong demand for its semiconductors used in mobile phones.

Chartered Semiconductor Manufacturing Ltd., the world's fourth-ranked supplier of made-to-order chips, swung to a better-than-expected quarterly profit of $25.3 million, but it forecast flat to slightly higher revenues in the second quarter.

(US$=T$32.0) REUTERS CS SND1157