UPDATE 1-Japan's Tokuyama to invest $670 mln in Malaysia plant

* Doubles polysilicon capacity at plant vs original plan

* To spend 30 pct more on Malaysia plant than original plan

* Shares close up 2.9 pct vs Nikkei's 0.6 pct rise (Adds background, details, share price)

TOKYO, Aug 11 - Japanese silicon maker Tokuyama Corp will invest 65 billion yen ($673 million) in a planned plant in Malaysia to boost its polysilicon production capacity by 75 percent and meet demand from solar cell makers.

Tokuyama, which trails U.S. firm Hemlock Semiconductor Corp in polycrystalline silicon, will launch the new plant in spring 2013 with annual production capacity of 6,000 tonnes -- double the original plan announced last year.

Tokuyama has taken a wait-and-see approach in capacity and has fallen far behind in a capacity race with Hemlock, nearly two-thirds owned by Dow Corning Corp, while rivals Wacker and new Chinese entrants close in.

Tokuyama, which supplies the key polysilicon ingredient to wafer makers including Sumco Corp, Renewable Energy Corp and MEMC Electronic Materials, had previously said it would invest 50 billion yen in the plant, to be built in Sarawak, east Malaysia.

Tokuyama now has polysilicon production capacity of 8,200 tonnes per year.

Its shares closed up 2.9 percent at 736 yen ahead of the announcement, outperforming the benchmark Nikkei average, which closed up 0.6 percent. ($1=96.63 Yen)