Advanced Semiconductor Manufacturing Corp, a Chinese chipmaker partly owned by Royal Philips Electronics NV, posted a third-quarter profit, after a year-earlier loss, on demand for chips used in cell phones.

Net income was 9.4 million yuan (US$1.18 million), compared with a loss of 53.6 million yuan a year earlier, the Shanghai-based company said yesterday in an e-mailed statement, citing international accounting standards. Sales rose 56 percent to a record 350.5 million yuan from 225.2 million yuan, Bloomberg News said.

Demand for chips used in mobile phones is increasing as more consumers in Asian nations such as China and India sign up for cellular services. China, the world's biggest mobile market by users, added 49.7 million subscribers in the first nine months, according to government data.

The number of Indian cell phone users may rise to 300 million by 2009 from about 78 million at the end of June, said research company Gartner Inc.

Profit for the first nine months was 31.5 million yuan, compared with a loss of 93 million yuan a year earlier. Sales rose 52 percent to one billion yuan from 656 million yuan.

Shares of Advanced Semiconductor fell nine percent to HK$1 (12 US cents)in Hong Kong before the earning's release. The stock is down 38 percent this year, compared with a 15 percent gain for the Hang Seng Index.

The company had an annual loss of 75 million yuan in 2005, compared with a profit of 182.6 million yuan in 2004.

Operating costs fell 34 percent to 23.5 million yuan from 35.5 million yuan a year earlier. The lower expenses were mainly due to a "stabilization" of eight-inch chip production and less development spending, the company said.

Philips, based in Amsterdam, is the chipmaker's biggest single shareholder with a 26.65 percent stake in the firm.