RESEARCH ALERT-BNP Paribas upgrades Taiwan's ASE to "buy"

* Upgrades rating for ASE on better sales outlook

* Expects ASE to be profitable in 2009

* Lifts ASE target price by 67 percent

TAIPEI, June 2 - BNP Paribas on Tuesday upgraded its rating for Taiwan's ASE <2311.TW>, the world's top chip packager, from "reduce" to "buy" on an upbeat sales outlook for the company through the second half of this year.

"We expect ASE's second-quarter sales to increase 52 percent from the previous quarter," said BNP analyst Szeho Ng.

"The momentum will continue to increase in the second half and should return to strong positive growth territory sometime in the fourth quarter, aided by an extremely depressed base last year."

ASE could also see more outsourcing from IDM (integrated device manufacturer) clients, giving the chip packaging company more business, as companies gradually bottom out from the downturn, the research house said.

BNP Paribas forecast ASE would post a net profit of T$2.074 billion ($64 million) this year, reversing its previous forecast of a net loss of T$1.194 billion.

The research house raised its target share price for the company by two-thirds to T$25, from T$15 previously. By 0335 GMT on Tuesday, ASE shares were up 2.21 percent at T$20.80, outpacing a 1.3 percent rise on the broader market <.TWII>. (US$1=T$32.4)