UMC, whose clients include Samsung, MediaTek and Qualcomm, said it will build a new chip plant at its existing manufacturing site in Singapore to produce chips using its 22 to 28 nanometer production technology.
This production tech is used to make a wide range of chip types used in consumer electronics, computers and cars.
The new facility is scheduled to begin mass production from the end of 2024, according to the chipmaker.
The planned capacity of 30,000 wafers per month has already been reserved by clients with long-term supply contracts, UMC said.
The expansion plan in Singapore will increase UMC’s capital expenditure for 2022 to US$3.6 billion, from the previously planned US$3 billion, the company said.
It spent US$1.8 billion on capex 2021.
UMC’s announcement comes as all the world’s top chipmakers are embarking on historic levels of capital expenditure.
Taiwan Semiconductor Manufacturing Co is expanding its capacity of the 28-nanometer chip production technology in the Chinese city of Nanjing.
It is also building its first ever chip plant in Japan for 22 to 28 nanometer technology.
In its home market, TSMC is building an additional 28 nanometer plant in the southern city of Kaohsiung.
Top Chinese chipmaker Semiconductor Manufacturing International Co is also constructing plants in Shenzhen, Shanghai and Beijing that can support 28 nanometer grade technology, which is seen as the most cost-effective production technology with a wide range of applications, from microcontrollers, WiFi and Bluetooth, to consumer electronics processors and driver ICs.
SMIC has shrugged off concerns of potential oversupply, saying China’s robust demand for local chip production would support the company’s expansion plans.
UMC’s expansions come against a backdrop of major economies – from US to Europe to Japan – rolling out billions of incentives to bring semiconductor production onshore due to national security concerns and the global chip shortage.
US-listed Globalfoundries, the world’s third-biggest contract chipmaker, also announced a US$4 billion investment plan to build a new plant in Singapore, which will be fully operational in 2024.