TSMC subsidiary Vanguard builds wafers with NXP for $7.8 billion in Singapore

Taiwan Semiconductor Manufacturing Co.-supported Vanguard International Semiconductor Corporation and Dutch chip designer and manufacturer NXP Semiconductors will construct a $7.8 billion wafer production facility in Singapore.

Vanguard will hold 60% of the shares within the three way partnership VisionPower Semiconductor Manufacturing Company, while NXP will hold 40%, in keeping with a joint statement published on Wednesday.

The VSMC plant will produce wafers for the automotive, industrial, consumer and mobile markets, the businesses said. TSMC will license the manufacturing technologies required for the project to VSMC.

The latest plant, which is anticipated to start construction within the second half of 2024 and start shipping wafers to customers in 2027, is anticipated to create around 1,500 jobs in Singapore, the joint statement said.

Wafers are thin slices of semiconductor material used to fabricate microchips.

NXP will invest $1.6 billion within the Singapore plant, while Vanguard will invest $2.4 billion, the statement said. The corporations may even provide an extra $1.9 billion to support the plant's long-term capability, with the remaining funds coming from third parties.

“NXP continues to take proactive steps to ensure it has a manufacturing base that offers competitive costs, supply control and geographic resilience to support our long-term growth objectives,” said Kurt Sievers, President and CEO of NXP.

Vanguard, the one Acquisition of a less modern wafer factory in Singapore for 236 million US dollars of New York-based contract chip maker GlobalFoundries in 2019, said the brand new plant would help it diversify its manufacturing activities.

Thanks to its business-friendly environment, Singapore has attracted investments from several semiconductor corporations.

GlobalFoundries opened a $4 billion chip factory in Singapore last 12 months, with the president praising the federal government's industrial policy. In 2022, Taiwan's United Microelectronics Corp invested $5 billion in its microchip factory in Singapore.

Neighbouring Malaysia has also turn into a hotspot for semiconductor corporations with investments from American chip giants Intel and GlobalFoundries. Other corporations have also submitted plans to begin operations within the country.

TSMC, the world's largest semiconductor maker, is constructing latest plants in countries similar to Japan and the United States as its customers seek to scale back risk in Taiwan amid rising tensions between the United States and China. Last 12 months, NXP invested in TSMC’s first chip plant in Dresden, Germany, TSMC's first plant in Europe.