Taiwan chipmaker United Microelectronics Corp is to pump $3.59bn into expanding production capacity in the wake of the global supplies crisis – though its new lines will not be rolling out chips until 2023.
UMC said it will spend the T$100 billion over the next three years and will guarantee supplies and prices to its clients as part of the plan.
Co-president Jason Wang told an earnings call the expansion will take place at an existing UMC facility in the Tainan Science Park on the island, with production scheduled to start from the second quarter of 2023.
UMC's total investment in the science park will reach $T150 billion over the next three years, he added.
"Amid the semiconductor component shortage, we are working with our customers, suppliers and partners to alleviate the capacity tightness across the supply chain," Wang said, adding they operated at full capacity in the first quarter and demand will outpace supply in the second quarter.
The company added in a statement that customers will be able to make a deposit that secures their long-term chip supply at the expanded plant using pre-determined pricing. It did not name the customers though their clients include Qualcomm Inc and Germany's Infineon.
The global chip shortage initially forced automakers to cut production but is now also hurting manufacturers of smartphones, laptops and even household appliances. Chip firms are racing to add capacity to keep up.
Wang said they were still seeing shortages "across the board".
UMC's competitor Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, this month said it plans to invest $100 billion over the next three years to increase capacity at its plants.
That announcement came days after Intel Corp announced a $20 billion plan to expand its capacity.
- Reporting by Reuters