Qualcomm and MediaTek reportedly are each holding a new round of negotiations with United Microelectronic Corporation (UMC) in order to gain an additional capacity for 28nm chips made using its PolySiON process, according to industry sources.

Tight production for 28nm chips at Taiwan Semiconductor Manufacturing Company (TSMC) and Globalfoundries' plan to shift to its HKMG process have forced the two chipset solution vendors to seek additional capacity at UMC, the sources explained.

Qualcomm has applied a price-cutting strategy to boost sales of its 4G chips amid reports indicating that MediaTek's 8-core 4G chip, the MT6595, has won a number of design-ins from China-based handset vendors including ZTE, Huawei and Lenovo, said the sources.

To face increasing competition, Qualcomm has sought to lower production costs by getting additional 28nm capacity from UMC, the sources noted.

MediaTek has been cooperating closely with UMC on production of 28nm chips which could give it an advantage in securing more capacity at UMC, commented the sources.