Vanguard and NXP Announce $7.8 Billion Semiconductor Wafer Plant in Singapore

Reflecting the global shift in semiconductor supply chains, Vanguard International Semiconductor Corporation (VIS) and NXP Semiconductors have announced the establishment of a joint venture, VisionPower Semiconductor Manufacturing Company (VSMC). The new venture will construct a state-of-the-art 12-inch wafer fabrication plant in Singapore, with an investment of $7.8 billion.

The new facility will mark a pivotal step in the global semiconductor industry's efforts to diversify its manufacturing footprint. TrendForce has noted a growing trend of companies moving their operations "Out of China, Out of Taiwan" to mitigate geopolitical and supply chain risks. This strategic shift aims to enhance regional capacity flexibility and competitiveness, responding to the increasing demand for resilient supply chains.

The VSMC plant will commence construction in the latter half of 2024, pending regulatory approvals, with production slated to begin in 2027. The facility will leverage mature 130nm to 40nm process technologies licensed from TSMC, targeting a wide array of markets including automotive, industrial, consumer, and mobile sectors. The projected monthly output is 55,000 wafers by 2029.

The joint venture is structured with VIS holding a 60% stake by investing $2.4 billion, while NXP holds the remaining 40% with a $1.6 billion investment. Additionally, both companies have agreed to contribute an extra $1.9 billion to support long-term capacity expansion, with the rest of the funding expected to come from third-party loans.

The new plant is anticipated to create approximately 1,500 jobs in Singapore, contributing significantly to the local economy. It will also adhere to Singapore Green Mark standards, implementing rigorous green manufacturing practices to ensure sustainability and environmental responsibility.

This development is part of a broader trend where Taiwanese semiconductor companies are expanding their overseas operations to reduce geopolitical risks. According to TrendForce, the diversification of semiconductor supply chains is becoming increasingly vital, with a clear bifurcation forming between China’s domestic supply chain and the non-China global supply chain.