United Microelectronics Co., the nation’s second-biggest contract chipmaker, Thursday said that its board has approved a capital expenditure budget of NT$12.57 billion to fund the expansion of new capacity, according to a company statement submitted to the Taiwan Stock Exchange.

UMC’s production capacity for 28nm processes has reached about 20,000 12-inch wafers per month, and will expand to almost 30,000 units in the first half of 2016, the company said.

Meanwhile, Taiwan Semiconductor Manufacturing Co. is expected to benefit from more smartphone brands’ decision to begin developing their own in-house mobile application processor chips, amid a slowdown in demand growth in the sector that began last year, TrendForce Analyst Avril Wu said Thursday.

One of the unmistakable trends in the industry is that major smartphone manufacturers have been hoping to gain product differentiation and cost savings by developing their own chips.

Therefore, TSMC is the first choice for many clients, which hopes to optimize their chips through the Taiwanese giant’s advanced 16nm and integrated fan-out (InFO) fabrication technologies.