A productive morning
Nandini Roy Choudhary, writer
In brief
- VisionPower Semiconductor Manufacturing Company will be a joint partnership between Vanguard and NXP. Vanguard will own 60% of the company, and NXP will own 40%.
- Building on the new plant should begin in the second half of 2024, and wafers should be sent to users in 2027.
- Vanguard invested in Singapore in 2019, and this move comes as semiconductor companies diversify their supply lines.
Taiwan Semiconductor Manufacturing Co. will provide funding for Vanguard International Semiconductor Corporation and NXP Semiconductors to build a $7.8 billion wafer manufacturing facility in Singapore.
An announcement made jointly on Wednesday states that Vanguard will hold 60% of VisionPower Semiconductor Manufacturing Company and 40% of NXP.
According to the companies, the VSMC unit will produce wafers for consumer, mobile, industrial, and automotive devices. TSMC will grant VSMC a license to use its manufacturing technologies for the project.
The new plant, which will begin construction in the second half of 2024 and begin exporting wafers to customers in 2027, will reportedly create 1,500 jobs in Singapore.
Semiconductor wafers are used to create microchips.
According to the release, Vanguard will invest $2.4 billion in the Singapore factory, while NXP will invest $1.6 billion. The corporations will add $1.9 billion to the plant’s long-term capacity, with third parties covering the rest.
Kurt Sievers, president and CEO of NXP, said the company takes proactive steps to guarantee its manufacturing base provides competitive pricing, supply control, and geographic resilience to enable long-term growth.
Vanguard, which bought a less sophisticated wafer facility in Singapore from New York-based contract chipmaker GlobalFoundries for $236 million in 2019, said the new unit will diversify its manufacturing activities.
Several semiconductor companies have invested in Singapore due to its business-friendly climate.
GlobalFoundries’ president praised Singapore’s industrial policy when it opened a $4 billion chip manufacturing plant last year. Taiwan’s United Microelectronics Corp. committed $5 billion to its Singapore microchip facility in 2022.
Intel and GlobalFoundries have invested in Malaysia, another semiconductor hub. Other firms have announced their ambitions to enter the country.
The world’s largest semiconductor foundry, TSMC, is establishing new operations in Japan and the U.S. as customers de-risk from Taiwan amid rising U.S.-China tensions. NXP invested in TSMC’s first European chip facility in Dresden, Germany, last year.
Source : CNBC News
