The board of directors of United Microelectronics (UMC) has authorized a capital budget execution of NT$27.406 billion (US$889.4 million) for capacity deployment.

The planned capex will be used to optimize production capacities at UMC's 8- and 12-inch fabs in China, Taiwan's TechNews quoted company sources as saying in a recent report.

UMC disclosed earlier in 2018 plans to expand production capacities at its 8- and 12-inch wafer plants in China through production subsidiaries HeJian Technology (Suzhou) and United Semiconductor (Xiamen). Both HeJian and United Semi are looking to expand their production capacities to meet ever-rising demand for mature and advanced-node logic ICs for use in automotive electronics, IoT and other emerging market segments, according to the Taiwan-based contract chipmaker.

Production capacity at HeJian's 8-inch fab, which commenced production in 2003, will grow by another 10,000 units monthly. The expansion is scheduled to be carried out in the second quarter of 2019.

The 12-inch fab run by United Semi, which kicked off production at the end of 2017, will have its monthly capacity expand to 250,000 wafers at the end of 2018 from the current 170,000 units.