NXP and TSMC-controlled Vanguard International Semiconductor Corporation (VIS) recently announced that they will form a joint venture, VisionPower Semiconductor Manufacturing Company (VSMC). and invested US$7.8 billion to build a state-of-the-art 300mm wafer fab in Singapore. The partnership marks a further step in the company's semiconductor space, particularly in chip production capacity in key markets such as automotive, industrial and consumer goods.
According to the investment plan, VIS will own 60 percent of the joint venture, while NXP will own 40 percent. In terms of funding, VIS plans to inject $2.4 billion into the joint venture, and NXP will inject $1.6 billion. The two companies have agreed to contribute an additional $1.9 billion to future investments, with the remainder likely to come from unspecified third parties or loans. Construction of the project is scheduled to start in the second half of 2024, with production expected to begin in 2027, with the new fab having a monthly production capacity of 55,000 300mm wafers by 2029.
The new facility will focus on the production of 130nm to 40nm mixed-signal, power management and analog chips that will be used in a wide range of functions such as power control and signal processing in automotive, industrial, consumer and mobile products. Although these chips are not as technologically advanced as TSMC's most advanced products produced in Taiwan, they will still meet the needs of several key industries due to their cost-effectiveness and stability in most applications. Compared with the existing 200mm fab in Singapore, the 300mm fab has significantly increased the chip output per wafer, so its production efficiency will be greatly improved.
Pictured: NXP and VIS invest $7.8 billion to build a factory in Singapore (Source: The Business Time)
The expansion project is not only to meet market demand, but also strategically important. As the geographic diversification of the global semiconductor supply chain accelerates, geopolitical factors are one of the key factors driving such investments. TSMC's concentration of production in Taiwan has led to concerns about the stability and security of supply chains, especially the trade friction between the United States and China. Singapore's political stability, technical talent and proximity to major consumer markets in Asia have made it a hot spot for a new round of investment in the semiconductor industry.
In addition, the project will significantly enhance Singapore's competitiveness in the global chip supply chain and further strengthen the position of NXP and VIS in the global market. The construction of the new plant will create 1,500 jobs in Singapore and inject new vitality into the local economy. At the same time, the project will improve the supply chain resilience of NXP and VIS and reduce their reliance on manufacturers in a single region to address potential geopolitical risks and market volatility.
It is worth mentioning that NXP has not only invested in the construction of a new factory in Singapore, but is also actively expanding its manufacturing footprint globally. Recently, NXP has invested in a chip production facility in Germany and is working with quantum computing startup eleQtron and the ParityQC and QSea consortium to advance quantum computing technology. VIS has five fabs in Taiwan and Singapore, leading the way in 8-inch wafer production capacity, and this expansion project will significantly increase its 300mm wafer production capacity and provide stronger support for the global semiconductor market.
Through this partnership, NXP and VIS will not only be able to respond to the needs of the current semiconductor market, but will also remain competitive in the face of future technology developments and market changes. Singapore's investment will be an important part of the global semiconductor industry, driving technological advancements and providing a more robust product supply chain for customers around the world.
