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Taiwan chipmaker UMC to spend $3.6 billion to expand capacity

(United Microelectronics Corp. photo)

(United Microelectronics Corp. photo)

Taiwan chipmaker United Microelectronics Corp 2303.TW said on Wednesday (April 28) it will spend NT$100 billion ($3.59 billion) over the next three years to expand capacity at a plant in southern Taiwan amid a global chip shortage.

Co-president Jason Wang told an earnings call the expansion will take place at an existing UMC facility in the Tainan Science Park, 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.

The global chip shortage initially forced automakers to cut production but is now also hurting manufacturers of smartphones, laptops, and even household appliances, and chip firms are racing to add capacity to keep up.

UMC competitor Taiwan Semiconductor Manufacturing Co (TSMC) 2330.TWTSM.N, 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 INTC.O announced a $20 billion plan to expand its capacity.

($1 = 27.8850 New Taiwan dollars)