Leading semiconductor foundries Taiwan Semiconductor ( TSM - Get Report) and United Microelectronics ( UMC - Get Report) preannounced relatively strong first-quarter sales, prompting Taiwan Semi CEO Harvey Chang to say revenue had touched bottom in the period.

The news provoked little support for the stock, however, given that both companies had previously signaled some improvement in sales was under way. In late afternoon trading Wednesday, Taiwan Semi shares lost 7 cents, or 0.9%, to $7.55, while UMC was flat at $3.36.

Taiwan Semi had already said first-quarter sales would come in above its original guidance for a high-single-digit to low-teens percentage sequential decline; it reported today that sales slid 4.4% from the prior quarter, noted Bear Stearns.

At Taiwan Semi, revenue for the first quarter was up nearly 10% from 2002 levels. Sales in March rose 12.8% from the same period a year ago. The company chalked up the increase to increased wafer shipments and increased demand for advanced technologies, including the 0.13-micron process technology.

UMC, which had said March sales would show a significant improvement over February, posted a nearly 29% rise in the one-month period.

Its first-quarter revenue was 47.2% above last year's levels. March sales rose 55.2% from a year ago.

"Taiwan foundry performance for the quarter appears to be tracking above our initial expectations," wrote Banc of America analyst Mark FitzGerald in a note this morning. Due to strong sales momentum, he predicted Taiwan Semi will offer better-than-expected guidance for the second quarter at its analyst meeting on April 29.

He said the foundries had likely benefited from share gains in advanced process technologies, low customer inventory levels and pockets of strength in flat panel displays and wireless communications.

Underscoring the extent of recovery that still lies ahead, however, capacity utilization rates remain low. The capacity utilization rate is a productivity metric that shows the amount of factory capacity being used to produce chips. In the first quarter, for example, UMC used only about 60% of its capacity for production.