Growing demand for newer and more advanced processing technologies should boost average selling prices for contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC) and United Microelectronics Corp (UMC). The two companies also expect to increase capital spending as the cyclical semiconductor industry recovers from a downturn which began in mid-2000. 'With the recovery in the semiconductor industry, we believe [capital expenditure] will be higher next year,' TSMC chief financial officer Lora Ho said. She reiterated TSMC's commitment to spending US$1.2 billion on plant and equipment upgrades this year and said the figure could rise next year. TSMC, the world's largest maker of chips on a contract basis, commands 51 per cent of the market and last week posted record monthly sales of NT$18.31 billion (HK$4.17 billion). Its second-quarter net income grew to $11.7 billion. Ms Ho said TSMC, after its second-quarter results, had expected average selling prices to stay flat. 'We're now thinking of increasing [average selling prices] because [the industry] is very strong,' she said. Rival UMC, the world's second-largest contract chipmaker, said strong demand for its advanced processing technology would help the firm maintain flat average selling prices or manage an increase.