UPDATE 1-TSMC posts small rise in Oct sales; '10 seen rosy

* Higher capex likely to boost sales, profits next year

* Stock up 0.8 pct before sales results, outpacing TAIEX

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By Baker Li

TAIPEI, Nov 10 (Reuters) - October sales at top contract chipmaker TSMC (2330.TW) were almost flat amid weaker tech demand but the firm could further boost its capital spending on advanced technology to help book record sales next year.

New technologies help boost output of advanced chips with fatter margins and cut costs, paving the way for TSMC (TSM.N) to win more orders from clients who are stepping up outsourcing to cut manufacturing expenses.

In late October, TSMC Chairman Morris Chang said he expected his company to post record sales and profit next year. TSMC has raised its 2009 capital spending by 17 percent to $2.7 billion and analysts expect its capex to break $3 billion next year.

That was much higher than smaller cross-town rival UMC's (2303.TW) budget of $500 million for this year. [ID:nTP163864] [ID:nTP112950]

"Confidence on a record year in 2010 are interesting first signals that our top of consensus, 29 percent year on year revenue growth estimate for TSMC in 2010 is realistic," CLSA said in a recent report.