United Microelectronics Corporation (UMC) has revealed it will hold a ceremony to officially kick off operations of the phase-three and phase-four production facilities at its 12-inch Fab 12A at the Southern Taiwan Science Park (STSP) on May 20, without giving further details.

Industry sources believe UMC's plan to move forward its 12-inch fab expansion is mainly to cope with growing demand from handset IC clients. The foundry was originally set to complete phase-three equipment installation at its STSP facility by the third quarter, with new capacity expected to come online in the fourth quarter.

UMC's third-phase expansion at its Fab 12A will have an initial output of 5,000 wafers, and the monthly output is expected to reach 15,000 units in the first half of 2011, the sources estimate. The new production line will be mainly for 65nm products, with plans for 40nm and 45nm nodes.

UMC's Fab 12A now has total capacity of 30,000 wafers a month, and its 12-inch fab in Singapore (UMCi) also has the same level as the Taiwan fab, the sources indicated.

Rival Taiwan Semiconductor Manufacturing Company (TSMC) has said it is set to complete fifth-phase expansion at its 12-inch Fab 12 at the Hsinchu Science Park (HSP), and fourth-phase at its 12-inch Fab 14 at the STSP by year-end 2010. It also announced plans to construct its third 12-inch fab.

In other news, UMC's board of directors has approved a plan to issue up to 1.298 billion new shares at a par value of NT$10 through private placement. The company expects to draw strategic partners in addition to operating funds, according to a company filing with the Taiwan Stock Exchange (TSE).