Taiwan Semiconductor Manufacturing Co.-backed Vanguard International Semiconductor Corporation and Dutch chip designer and manufacturer NXP Semiconductors will construct a $7.8 billion wafer manufacturing plant in Singapore.
Vanguard will own 60% of the joint venture, VisionPower Semiconductor Manufacturing Company, while NXP will own 40%, according to a joint statement issued Wednesday.
The VSMC plant will make wafers for the automotive, industrial, consumer, and mobile device markets, the companies said. TSMC will license the underlying manufacturing technologies needed for the project to VSMC.
The new plant, which is expected to begin construction in the second half of 2024 and ship wafers to customers in 2027, will create approximately 1,500 jobs in Singapore, according to the joint statement.
Wafers are thin slices of semiconductor material used to manufacture microchips.
NXP will invest $1.6 billion in the Singapore plant, while Vanguard intends to invest $2.4 billion, according to the statement. The firms will also contribute an additional $1.9 billion to support the plant’s long-term capacity, with the remainder coming from third parties.
“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,” said Kurt Sievers, president and CEO of NXP.
Vanguard, which acquired a less advanced wafer facility in Singapore from New York-based contract chipmaker GlobalFoundries for $236 million in 2019, said the new plant will help it diversify its manufacturing operations.
Singapore has attracted investments from several semiconductor companies, owing to its business-friendly environment.
GlobalFoundries opened a $4 billion chip fabrication plant in Singapore last year, and its president praised the government’s industrial policies. United Microelectronics Corp of Taiwan will invest $5 billion in its Singapore microchip factory in 2022.
Malaysia has also emerged as a semiconductor hotspot, attracting investments from American chip giants Intel and GlobalFoundries. Other companies have also announced plans to establish operations in the country.
TSMC, the world’s largest semiconductor foundry, has been building new plants in Japan and the United States as customers seek to diversify away from Taiwan in the face of rising US-China tensions. Last year, NXP invested in TSMC’s first chip plant in Dresden, Germany, which is also the company’s first in Europe.
