TSMC-backed Vanguard and Dutch firm NXP to build $7.8 billion Singapore wafer plant

Taiwan Semiconductor Manufacturing Co.-backed Vanguard International Semiconductor Corporation and Dutch chip designer and manufacturer NXP Semiconductors have announced plans to construct a $7.8 billion wafer manufacturing plant in Singapore.

The joint venture, named VisionPower Semiconductor Manufacturing Company, will see Vanguard holding a 60% stake while NXP will have a 40% share, as stated in a joint release on Wednesday. The facility is set to produce wafers catering to the automotive, industrial, consumer, and mobile device markets. TSMC will provide the necessary manufacturing technologies for the project.

Construction of the new plant is slated to commence in the latter half of 2024, with the first wafers expected to be shipped to customers by 2027. The endeavor is anticipated to generate approximately 1,500 employment opportunities in Singapore. Wafers are essential components in the production of microchips.

NXP’s investment in the Singapore plant is projected to reach $1.6 billion, while Vanguard plans to inject $2.4 billion into the project. Both companies, along with additional third-party contributions, will allocate an extra $1.9 billion to ensure the long-term capacity of the plant.

NXP’s President and CEO, Kurt Sievers, emphasized the strategic importance of establishing a robust manufacturing base to align with the company’s growth objectives. Vanguard views this initiative as a means to broaden its manufacturing footprint.

Singapore’s business-friendly environment has attracted various semiconductor firms, with GlobalFoundries and United Microelectronics Corp among the companies that have recently made significant investments in the country. TSMC’s expansion into other regions such as Japan and the U.S. reflects a broader industry trend aimed at mitigating risks associated with geopolitical tensions.

The collaboration between Vanguard and NXP underscores the growing significance of Singapore as a hub for semiconductor manufacturing, with significant investments pouring into the region from key industry players.