Shanghai Huali Microelectronics (HLMC) is expected to announce by the end of 2016 the construction of its second 12-inch plant, which will directly enter 28nm production, according to industry sources.

HLMC's upcoming 12-inch facility will be ready for volume production of chips built using 28nm process technology in 2018, said the sources.

MediaTek will be among the initial customers of HLMC's new 12-inch fab, which will be capable of producing 40,000 12-inch wafers monthly, the sources indicated.

HLMC already has a 12-inch fab for the manufacture of chips using 65/55nm and 40nm process technologies. The fab, with monthly capacity of about 35,000 units, has run at full capacity with strong demand from MediaTek for logic chips, and Winbond Electronics and GigaDevice Semiconductor for NOR flash memory, the sources suggested.

Founded in 2010, HLMC is a 12-inch foundry majority owned by the Shanghai government. HLMC around the end of 2015 announced it had completed the tape-out of a 28nm mobile chip design for MediaTek.