NXP Semiconductors and TSMC-backed Vanguard announced a US$7.8 billion joint venture to produce silicon wafers on Wednesday (Jun 5), joining other chipmakers setting up plants in Singapore to diversify their manufacturing base.
Taiwan’s Vanguard International Semiconductor Corp will invest US$2.4 billion for a 60 per cent stake, while NXP will invest US$1.6 billion and hold 40 per cent, they said in a joint statement.
The firms will also provide an additional US$1.9 billion to support the long-term capacity of the plant.
Construction of the plant is expected to begin in the second half of 2024, with initial production available to customers in 2027, the firms said in a statement.
By 2029, the factory is expected to produce 55,000 300 mm wafers per month and supply proportional capacity to its two equity partners.
The wafers will be used mainly to produce mature technology-node chips used in vehicles, mobile devices, consumer electronics goods and industrial products.
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There were severe shortages of these so-called legacy chips during the Covid-19 pandemic and they are still seeing growing demand.
TSMC, which according to LSEG data owns around 28 per cent of Vanguard, said on Tuesday it has held talks with customers about whether to move its fabrication plants out of Taiwan amid increased tensions with China, although such a move would be impossible.
Singapore is a major hub for the manufacture of legacy chips and has attracted new investment in recent years, lured by its relatively low tax rates and close geographical proximity to China, the world’s biggest semiconductor market.
In 2022 Taiwan’s United Microelectronics Corp announced a US$5 billion investment on a new chip factory in Singapore while contract chipmaker GlobalFoundries opened a US$4 billion chip fabrication plant there last year.
A spokesperson for NXP said the investment was one of the largest in the company’s history and would help to improve “geographical diversity for our most strategic technology nodes”.
The joint venture, which will be operated by Vanguard, is expected to create about 1,500 jobs in Singapore, the companies said. REUTERS
