Taipei, Feb. 24 (CNA) Taiwan-based contract chipmaker United Microelectronics Corp. (UMC) announced Thursday that its board of directors has approved a plan to build a new wafer fab in Singapore using 22 nanometer and 28nm processes.

In a statement, UMC said the new advanced manufacturing facility will be built next to its existing 300mm plant, known as Fab12i, with the planned investment for the project to be US$5 billion.

In the first phase, the new fab will have a monthly capacity of 30,000 wafers, with production expected to start in late 2024, UMC said.

According to the company, the wafer plant, which it named Fab12i P3, will be one of the most advanced semiconductor foundries in Singapore.

"The new fab is backed by customers who have signed multi-year supply agreements in order to secure capacity from 2024 and beyond, which points to robust demand outlook for UMC's 22/28nm technologies for years to come, driven by 5G, Internet of Things and automotive mega-trends," UMC said.

The Taiwanese firm added that specialty technologies to be manufactured in the new facility, such as embedded high voltage and non-volatile memory, are critical for a broad range of applications ranging from smartphones and smart home devices to emerging electric vehicle applications.

UMC said it expects the new fab to play "an important role in satisfying growing demand in these markets and help alleviate the structural shortage of foundry capacity, especially on 22/28nm processes."

UMC Chairman Stan Hung (洪嘉聰) said the expansion of the company's manufacturing facilities in Singapore will enable it to further diversify its manufacturing footprint.

"Over the past two decades, UMC has benefited from Singapore's vision of attracting high tech firms through strong infrastructure, ecosystem, and talent pool," Hung said, adding that new research and development projects undertaken in collaboration with customers will enter production when the new facility comes online.