Question-and-Answer Session
[Operator Instructions]. Your first question comes from the line of Bhavin Shah with JPMorgan. Please proceed
Bhavin Shah - JPMorgan
Yes. Hi, everyone. I have? Let me ask first question on the outlook for the industry growth and TSMC's growth. Rick you mentioned 4% to 6% for semiconductor industry and TSMC doing some what better than that. If I take your second quarter growth [ph] and assume that there is some growth in third quarter, which I believe there is, even if I assume flat fourth quarter, you end up with 13% revenue growth. So, is that a case for revising up your sort of rough outlook for the industry or more importantly for TSMC for 2008?
Rick Tsai - President and Chief Executive Officer
Yes. Bhavin I think, of course, your arithmetic is correct. Actually if you look out our first quarter and the second quarter guidance which represent already, I think, roughly 25% growth year-over-year compared to the first half of last year. For the whole year, I cannot really comment on your numbers, but I think it is not really that difficult to calculate for the second half. Basically, this year in 2008, I still want to? Although we see a steady increase in our demand in second quarter and we do not feel slowdown in such demand, but, considering the weather severity, I should say both the macro economic situation in the US and may be in the developed economies, we certainly want to exercise caution and we don't want to be too aggressive in projecting our whole year results, just yet, all right.
Bhavin Shah - JPMorgan
Okay. Second question is for Lora, in the first quarter currency ended up being stronger than your expectation and that probably contributed a little bit, perhaps, to the fact that revenue didn't go all the way to the high end of your guidance. But your gross margin was closer to the high end of the guidance, in spite of this currency surprise. So, what contributed to this stronger profitability in light of the change in currency?
Lora Ho - Vice President, Chief Financial Officer and Spokesperson
I think it is basically a combination of better cost control, operating expense saving, eliminating waste, and from time-to-time, the productivity improvement that we have seen for [inaudible] people continue doing that. So it's no secret, just a lot of hardworking and the continued improvement.
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