The long-term agreement will see Intel, based in the US, and UMC, based in Taiwan, combine their strengths to create a new process platform for high-growth markets such as mobile, communication, and networking.
The deal will give global customers more choice and flexibility in where they get their chips from, with access to a more diverse and reliable supply chain.
Intel's boss, Stuart Pann, said, "Taiwan has been a key player in the global tech scene for decades, and Intel is keen to work with innovative companies like UMC to serve our customers better."
He added: "Our collaboration with UMC shows our commitment to delivering cutting-edge technology and manufacturing across the global chip industry and is a big step towards our goal of becoming the world's second-biggest foundry by 2030."
UMC's co-president Jason Wang said: "We are thrilled to team up with Intel on a US-made 12 nm process with FinFET capabilities, which is a leap forward in our strategy of expanding our capacity and advancing our technology."
He said: "This will help our customers move to this new node smoothly and benefit from the added security of a Western footprint. We are excited about this strategic partnership with Intel, which widens our market and speeds up our development using the best of both worlds."
The 12 nm node will use Intel's US-based manufacturing and experience in FinFET transistor design, offering a great mix of maturity, performance and efficiency.
The production will benefit from UMC's decades of leadership and expertise in providing foundry services to customers.
The new process node will be developed and made in Fabs 12, 22 and 32 at Intel's Ocotillo site in Arizona. Using existing equipment in these fabs will reduce upfront costs and optimise the use.
The two companies will collaborate on design support for the 12 nm process, using the best solutions from the ecosystem partners to meet customer demand.
The production of the 12 nm process is expected to start in 2027.
Intel has sites and investments in Oregon, Arizona, New Mexico, Ohio, Ireland, Germany, Poland, Israel, and Malaysia.
Chipzilla's foundry arm, IFS, claims to have made significant progress over the past year, gaining new customers and expanding its foundry network. IFS expects to keep up the momentum this year.
Meanwhile, UMC claims to have grown its base across Asia and been a leader in mature nodes and specialty foundry services.
