TAIPEI, April 19 (Reuters) - TSMC's Taipei-listed shares tumbled 6.7% on Friday following the company's first-quarter earnings report in which it dialed back its expectations for chip sector growth and did not revise up its capital spending plans, contrary to expectations.

Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, forecast second-quarter sales may rise as much as 30% as it rides a wave of demand chips used in artificial intelligence (AI) applications. Its first-quarter profit also beat estimates.

But it left its capital spending plans for this year unchanged at between $28 billion and $32 billion and reiterated it expected 2024 revenue to rise in the low- to mid-20% range in U.S. dollar terms.

It lowered its outlook for the global semiconductor industry excluding memory to a growth rate of around 10% from a previous forecast of more than 10%.

TSMC, a major supplier to Apple and Nvidia , also downgraded its growth forecast for the global foundry sector to a mid-to-high teens percentage gain from a previous projection of around 20%.

Allen Huang, vice president of Mega International Investment in Taipei, said the market was reacting to the revised outlook for the semiconductor industry, adding that TSMC had been expected to increase capital expenditure this year for high-end packaging.

"If capital expenditure was only maintained at the previous level, it means that profit is not as expected," he said.

Another Taiwan fund manager, who asked not to be identified, said given TSMC's recent stock rally investors had high expectations heading into first-quarter earnings.

"Its capex has not been so aggressive, and the percentage of advanced process technologies revenue compared to overall revenue is still pretty low," the manager said.

TSMC's poor share price performance dragged on the broader Taipei market which closed down 3.8%, losing 774 points - the most it has lost in a single day. Sentiment was also hit by a rise in tensions between Israel and Iran.

TSMC has other challenges, too.

Speaking on Friday after being given an honor for his services to Taiwan, TSMC's retired and much revered founder Morris Chang said the company's current leadership needed "great wisdom" to navigate challenges to "dying" globalization given how the firm had benefited so much from free trade.

"TSMC also faces resources challenges: land, water, power, talent, which need continued support from the government and all others," he said at the presidential office in Taipei, referring to limitations Taiwan's tech industry has long worried about. (Reporting by Ben Blanchard and Yimou Lee; Additional reporting by Faith Hung, Roger Tung and Jeanny Kao; Editing by Shri Navaratnam and Edwina Gibbs)