TSMC-backed Vanguard And NXP To Construct $7.8 Billion Wafer Plant In Singapore

Taiwan Semiconductor Manufacturing Co., sponsored by Vanguard International Semiconductor Corporation, and NXP Semiconductors, a Dutch chip designer and manufacturer, will construct a $7.8 billion wafer manufacturing plant in Singapore. 

TakeAway Points:

  • According to a joint release, Vanguard will own 60% of the joint venture, VisionPower Semiconductor Manufacturing Company, while NXP will control 40%. 
  • Construction on the new plant is anticipated to begin in the second half of 2024, with wafer shipments to customers beginning in 2027.
  • This action coincides with semiconductor companies’ efforts to diversify their supply chains, and it comes after Vanguard’s 2019 investment in Singapore.

TSMC’s Wafer Manufacturing Plant

According to a joint statement made on Wednesday, Vanguard will own 60% of the joint venture, VisionPower Semiconductor Manufacturing Company, while NXP will control 40%.  

The firms stated that the VSMC unit will manufacture wafers for the consumer, automotive, industrial, and mobile device markets. The underlying manufacturing technologies needed for the project will be licenced to VSMC by TSMC

According to the joint statement, around 1,500 jobs are anticipated to be created in Singapore by the new plant, which construction is anticipated to begin in the second half of 2024 and wafers to be shipped to customers in 2027. Wafers are tiny semiconductor slices that are used to create microchips.

According to the release, NXP would put in $1.6 billion and Vanguard $2.4 billion in the Singapore factory. To support the plant’s long-term capacity, the companies will additionally contribute an extra $1.9 billion; third parties will cover the remaining costs.

“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 at NXP.

The New plant to Assist Vanguard

The new factory will aid Vanguard in diversifying its manufacturing activities. In 2019, Vanguard paid $236 million to acquire a less sophisticated wafer facility in Singapore from New York-based contract chipmaker GlobalFoundries.

Because of its business-friendly atmosphere, Singapore has drawn investments from a number of semiconductor businesses.

The head of GlobalFoundries praised the government’s industrial policy when the company constructed a $4 billion chip manufacturing facility in Singapore last year. Taiwan’s United Microelectronics Corp. committed $5 billion in its semiconductor facility in Singapore in 2022.

With investments from US chip behemoths Intel and GlobalFoundries, neighbouring Malaysia has also become a hub for semiconductor companies. Plans to begin operations in the nation have also been announced by other businesses. 

As U.S.-China tensions increase, TSMC, the largest semiconductor foundry globally, is helping its customers reduce risk by constructing new operations in nations like Japan and the U.S.  NXP made an investment in TSMC’s first chip production in Europe, located in Dresden, Germany, last year.

About

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is also known as Taiwan Semiconductor, is a multinational Taiwanese semiconductor contract manufacturing and design company. Located in the Hsinchu Science Park in Hsinchu, Taiwan, this corporation is the largest in its home nation and the second most valuable semiconductor company in the world. It is also the largest independent semiconductor foundry in the world. Taiwan’s central government is TSMC’s top stakeholder, with foreign investors owning the majority of the company.