TSMC affiliate Vanguard to partner with NXP to build $7.8 billion Singapore wafer deal

A worker moves a wafer bank at the NXP Semiconductor computer chip manufacturing plant in Nijmegen, the Netherlands, on March 14, 2024.

Piroska van de Wouw | Reuters

Taiwan Semiconductor Manufacturing Co.-backed Vanguard International Semiconductor Corporation and Dutch chip designer and manufacturer NXP Semiconductors Will set up a $7.8 billion wafer manufacturing plant in Singapore.

According to a report, Vanguard will hold a 60% stake in the joint venture — VisionPower Semiconductor Manufacturing Company — while NXP will hold 40%. Joint statement issued on Wednesday,

The VSMC plant will produce wafers for the automotive, industrial, consumer and mobile device markets, the companies said. TSMC will license the underlying manufacturing technologies needed for the project to VSMC.

The joint statement said construction of the new plant is expected to begin in the second half of 2024, and wafers will be shipped to customers in 2027. It is expected to create about 1,500 jobs in Singapore.

Wafers are thin pieces of semiconductor material used to make microchips.

NXP will invest $1.6 billion in the Singapore plant, while Vanguard plans to invest $2.4 billion, the statement said. The two companies will also provide an additional $1.9 billion to maintain the plant’s long-term capacity, while the remaining funds will be provided by third parties.

“NXP is taking proactive steps to ensure it has a manufacturing base that provides competitive costs, supply control and geographic flexibility to support our long-term growth objectives,” said Kurt Sievers, NXP president and CEO.

Vanguard, which Acquisition of a low-end wafer facility in Singapore for $236 million The company, which acquired New York-based contract chip maker GlobalFoundries in 2019, said the new plant will help diversify its manufacturing operations.

Singapore has attracted investments from many semiconductor companies due to its business-friendly environment.

GlobalFoundries has a $4 billion chip manufacturing plant in Singapore Last year, Taiwan’s President praised the government’s industrial policies. In 2022, Taiwan’s United Microelectronics Corporation $5 billion invested in Singapore microchip factory,

Neighbouring Malaysia It also emerged as a centre of attraction for semiconductor companiesInvestments from US chip giants Intel and GlobalFoundries have been planned to start operations in the country. Other companies also plan to start operations in the country.

TSMC, the world’s largest semiconductor foundry, is building new plants in countries like Japan And America Because its customers want to reduce risks from Taiwan amid rising US-China tensions. Last year, NXP invested in TSMC First chip plant in Dresden, Germany, TSMC’s first plant in Europe.

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