The Investment Commission of Taiwan's Ministry of Economic Affairs (MOEA) has approved TSMC's proposal to set up a 12-inch wafer fab and a design service center in Nanjing, China for up to US$3 billion.

The investment proposal was submitted by TSMC to Taiwan's Investment Commission in December 2015.

TSMC has disclosed plans to hire a total of 1,700 people for its 12-inch fab and design service center in Nanjing, which will be wholly-owned by the Taiwan-based contract chipmaker.

TSMC noted its 12-inch fab in Nanjing is scheduled to begin production of 16nm chips in the second half of 2018, when the foundry's more-advanced 10nm chips will be in production for more than a year.

TSMC reiterated plans to have the Nanjing fab produce 20,000 12-inch wafers monthly account for about 2.5% of the foundry's overall production capacity.