Hsin-Chu, Taiwan -- The world's leading made-to-order microchip maker, Taiwan Semicon-ductor Manufacturing Co, said yesterday that sales last month fell 9.9% year-on-year but rose 3.7% from the previous month due to increased demand.

SMC’s sales last month came in at U.S.$651.56 million, up 3.7% from June.

Sales in the seven months to last month fell to NT$135.02 billion from NT$145.53 billion previously, it said.

"Thanks to continued demand recovery among our customers, wafer shipments in July increased from the previous month," Lora Ho, TSMC's vice president and CFO said in a statement.

The company said that average selling prices in the third quarter will drop 3 to 5% from the second quarter.

Still, TSMC said its factory use is expected to be more than 90% this quarter, up from 85% in Q2. Wafer shipments will also probably rise 14 to 16% in the third quarter.

Separately, United Microelectronics Corp. said its sales last month rose 6.96% from June, but were down 36.93% from a year earlier.

Sales in the first seven months of the year fell to NT$46.79 billion from $65.70 billion previously, said the world's second-largest maker of made-to-order semiconductor chips.

The two companies' July sales "numbers are slightly weaker than expected," Frank Wu, a fund manager at First Global Investment Trust Co., told the Taipei Times.

According to Wu, demand will probably grow strongly in August and September as personal computer and mobile-phone makers may need more chips.