VIS and NXP to Build $7.8 Billion Semiconductor Facility in Singapore

Taiwan’s Vanguard International Semiconductor Corporation, a leading specialty IC foundry service provider, and Dutch chip manufacturing giant NXP Semiconductors, have announced plans to create a manufacturing joint-venture (JV) VisionPower Semiconductor Manufacturing Company Pte Ltd (VSMC) which will build a new $7.8 billion 300mm semiconductor wafer manufacturing facility in Singapore.

The JV fab will support 130 nanometre chips to 40 nanometre chips, mixed-signal, power management and analog products, targeting the automotive, industrial, consumer and mobile end markets. The underlying process technologies are planned to be licensed and transferred to the JV from Taiwan Semiconductor Company (TSMC).

Global investors in chip manufacturing sector are looking at Southeast Asian countries, which have emerged as an attractive alternative for investment for both the US and European chip makers. Germany’s Infineon, the US-based Micron Technology, and NXP, through a previous partnership with TSMC, have already established their presence in Singapore.

The JV will begin construction of the initial phase of the wafer fab in the second half of 2024, pending receipt of all required regulatory approvals, with initial production available to customers during 2027.

It will operate as an independent, commercial foundry supplier, providing assured proportional capacity to both equity partners, with an expected output of 55,000 300mm wafers per month in 2029.

VSMC will create approximately 1,500 jobs in Singapore and upon the successful ramp of the initial phase, a second phase will be considered and developed pending commitments by both equity partners.

Of the project cost, VIS will inject $2.4 billion representing a 60% equity position in the JV and NXP will inject $1.6 billion for the remaining 40% equity position. VIS and NXP have agreed to contribute an additional $1.9 billion which will be utilised to support the long-term capacity infrastructure. The remaining funding including loans will be provided by third parties to the JV and the fab will be operated by VIS.

Adopts Singapore Green Mark

VIS Chairman Leuh Fang said that his company will be working NXP, leading global semiconductor company, to build their first 300mm fab. This project aligns with VIS’ long-term development strategies, demonstrating its commitment to meet customer demands, and diversify their manufacturing capabilities.

“Adhering to the vision of business sustainability, this fab will be built adopting the Singapore Green Mark standards and implementing rigorous green manufacturing measures. We will continue to create great value for our stakeholders and look forward to working with customers, suppliers, local talents, and government to continuously contribute to Singapore and the global semiconductor ecosystem,” Fang said.

NXP President and CEO Kurt Sievers, said that NXP continues to take proactive actions to ensure it has a manufacturing base which provides competitive cost, supply control, and geographic resilience to support our long-term growth objectives.

“We believe VIS is well suited and fully understands the complexities involved in building and operating together with NXP a 300mm analog mixed signal fab. The JV intends to create with VIS perfectly aligns within NXP’s hybrid manufacturing strategy,” he added.

Though these chips are less advanced than those TSMC itself manufactures in Taiwan. But the 300mn wafer capability marks a first for VIS, which currently fabricates 200mm wafers at its existing plant in Singapore. The larger size of the 300mn wafers enables the production of a higher number of chips.

Taiwan is producing approximately 90% of the world’s most advanced chips but China is the market leader for lower-end semiconductors.