MEMS and Sensors

VIS and NXP collaborate on new 300 mm fab

06 June 2024

Taiwanese foundry Vanguard International Semiconductor Corp. (VIS) and NXP Semiconductors N.V. plan to create a joint venture 300 mm semiconductor wafer fab in Singapore.

Called VisionPower Semiconductor Manufacturing Company Pte Ltd. (VSMC), the jointed venture fab will support the production of 130 nm to 40 nm mixed-signal, power management and analog products. These semiconductors will target the automotive, industrial, consumer and mobile end markets, the companies said.

Under the JV, VIS will invest $2.4 billion, about a 60% equity position in the JV, and NXP will invest about $1.6 billion for the remaining 40% equity. Both companies said they will invest an additional $1.9 billion to support long-term capacity infrastructure. Remaining funding will include loans from third parties.

VIS will operate the fab and the process technologies are planned to be licensed and transferred to the JV fab from Taiwan Semiconductor Manufacturing Co. (TSMC).

The fab

Construction of the fab will begin in the second half of 2024 pending regulatory approvals with production slated to start in 2027.

VSMC will operate as an independent, commercial foundry supplier and provide capacity to both VIS and NXP with an expected output of 55,000 300 mm wafers per month by 2029. The fab will create about 1,5000 jobs in Singapore

Additionally, a second phase of the fab will be considered and developed pending commitments by both companies.

Why it matters

Globally, semiconductor manufacturing is expanding to different regions in the world after being consolidated in three main locations — Taiwan, China and Korea — for the better part of the last three decades.

This is happening for several reasons. First, countries are seeking to prevent future issues with the chip supply chain by developing homegrown semiconductor manufacturing. The idea is to insulate the supply chain if another pandemic like COVID-19 hits.

Secondly, Taiwanese companies are accelerating overseas capacity to improve capacity flexibility and competitiveness, according to market research firm TrendForce. Also, the diversification in the supply chain will help to mitigate geopolitical risks, specifically of Taiwanese foundries if China attacks the nation.

Over the past two years, TSMC has rapidly expanded its semiconductor manufacturing outside of Taiwan including at least three fabs in Arizona to meet anticipated demand in the region. TSMC also received $6.6 billion in direct funding from the U.S. government through the CHIPS and Science Act.

TSMC is also investing heavily in Japan. The first fab located in Kumamoto Prefecture opened earlier this year and the company plans to build a second fab at the location with operations to start by the end of 2027.

VIS’ capacity utilization rate is expected to rise to about 75% in the second half of this year with Vanguard operating four 8-inch wafer plants in Taiwan and one in Singapore. VIS faces increased competition from 12-inch wafer plants in China, compelling the company to enter the 12-inch foundry market, TrendForce said.

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