TAIPEI: Taiwan will overtake the United States to become the world's second-biggest microchip supplier this year, a news agency reported on Sunday.

Taiwan will account for 18 per cent of global semiconductors, behind Japan with 24 per cent, the agency said, citing a report by the official Industrial Technology Research Institute.

The sector has been boosted by the continuing expansion of plants producing 12-inch (300-mm) wafers in Taiwan, said institute analyst Peng Kuo-chu. In the three months to December, Taiwan's semiconductor makers are forecast to churn out 595,000 12-inch wafers, 16 per cent more than a year ago, he said.

The United States and South Korea are expected to tie at third with a 17 per cent share.