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    TSMC Affiliate VIS and NXP to Invest USD 7.8 Billion for 12-Inch Fab in Singapore

    TSMC Vanguard Singapore

    Source: TrendForce

    Vanguard International Semiconductor (VIS), an affiliate of TSMC, announced today a joint venture with NXP to build a 12-inch fab in Singapore. According to its press release, the construction is set to begin in the second half of 2024, with mass production expected by 2027. The initial investment for the fab is approximately USD 7.8 billion.

    VIS stated in the official press release that it will establish a joint venture company, VisionPower Semiconductor Manufacturing Company (VSMC), with NXP in Singapore to build a 12-inch fab. The joint-venture fab will support 130nm to 40nm mixed-signal, power management and analog products, targeting the automotive, industrial, consumer and mobile end markets, of which its underlying process technologies are planned to be licensed and transferred to the joint venture from TSMC.

    The company further stated that the joint venture will begin construction of the initial phase of the wafer fab in the second half of 2024, pending receipt of all required regulatory approvals, with initial production available to customers during 2027.

    The joint venture will operate as an independent, commercial foundry supplier, providing assured proportional capacity to both equity partners, with an expected output of 55,000 300mm wafers per month in 2029. The joint venture will create approximately 1,500 jobs in Singapore. Upon the successful ramp of the initial phase, a second phase will be considered and developed pending commitments by both equity partners.

    The total cost of the initial build out is anticipated to be USD 7.8 billion. VIS will inject USD 2.4 billion representing a 60 percent equity position in the joint venture and NXP will inject $1.6 billion for the remaining 40 percent equity position. VIS and NXP have agreed to contribute an additional USD 1.9 billion which will be utilized to support the long-term capacity infrastructure. The remaining funding including loans will be provided by third parties to the joint venture. The fab will be operated by VIS.

    “VIS is pleased to work with leading global semiconductor company NXP to build our first 300mm fab. This project aligns with our long-term development strategies, demonstrating VIS’ commitment to meeting customer demands, and diversifying our manufacturing capabilities,” said VIS Chairman Leuh Fang.

    “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, NXP President and CEO. “We believe VIS is well suited and fully understands the complexities involved in building and operating together with NXP a 300mm analog mixed signal fab. The joint venture partnership we intend to create with VIS perfectly aligns within NXP’s hybrid manufacturing strategy.”

    Regarding this move, TrendForce posits that it reflects the trend of global supply chains shifting “Out of China, Out of Taiwan”(OOC/OOT), with Taiwanese companies accelerating their overseas expansion to improve regional capacity flexibility and competitiveness.

    TrendForce noted that the semiconductor supply chain has been diversifying over the past two years to mitigate geopolitical and pandemic-related risks, forming two major segments: China’s domestic supply chain and a non-China supply chain. Recent US tariff increases have accelerated this shift, leading to increased orders from American customers.

    Consequently, Vanguard’s capacity utilization rate is expected to rise to approximately 75% in the second half of this year, exceeding initial expectations. Additionally, inquiries for capacity at Vanguard’s existing Singapore Fab 3E plant have significantly increased, indicating potential support for the new plant’s capacity from customer demand and order transfers, according to Trendforce.