Singapore Secures $7.8B Semiconductor Manufacturing Facility for Automotive and Industrial Chips

Singapore is set to welcome a groundbreaking $7.8 billion semiconductor manufacturing facility that will cater to the automotive, industrial, and mobile industries. This ambitious project is the result of a partnership between Vanguard International Semiconductor Corporation (VIS) and NXP Semiconductors, culminating in the formation of a new wafer manufacturing entity called VisionPower Semiconductor Manufacturing Company. With a dedicated investment of $7.8 billion, VisionPower will operate independently, focused on producing 12-inch chips crucial for various technological applications.

Construction of the state-of-the-art plant is slated to commence later this year, with the initial production expected to hit the market by 2027. “This project aligns with our long-term development strategies, demonstrating VIS’s commitment to meeting customer demands and diversifying our manufacturing capabilities," stated Leuh Fang, Chair of VIS. “We aim to create significant value for our stakeholders and look forward to collaborating with customers, suppliers, local talent, and the government to contribute meaningfully to Singapore and the wider semiconductor ecosystem.”

Currently, VIS specializes in eight-inch wafer fabrication, primarily supplying memory chips, including DRAM. The company has established a manufacturing footprint in Singapore, having acquired a GlobalFoundries site for $236 million in 2019.

NXP Semiconductors, a prominent Dutch chip manufacturer, emerged from Phillips and has undergone various ownership changes, including a failed acquisition attempt by Qualcomm in 2018. The newly formed joint venture is anticipated to produce an impressive 55,000 300 mm wafers each month upon reaching full operational capacity. To finance this venture, VIS will invest $2.4 billion for a 60% equity stake, while NXP will contribute $1.6 billion for a 40% share. An additional $1.9 billion is reserved for enhancing long-term capacity infrastructure.

The establishment of this manufacturing facility is expected to create approximately 1,500 jobs in Singapore. If successful, there are plans for a possible expansion or a “second phase” of the project. “NXP is taking proactive steps to ensure a robust manufacturing base that supports our long-term growth objectives by providing competitive costs, supply control, and geographic resilience,” noted Kurt Sievers, President and CEO of NXP. “We believe that VIS is uniquely positioned to navigate the complexities of building and operating a 300 mm analog mixed-signal fab in partnership with NXP. This joint venture aligns seamlessly with NXP's hybrid manufacturing strategy.”

Additionally, VIS's backer, the Taiwan Semiconductor Manufacturing Company (TSMC), is already on track to launch a $5 billion factory in Singapore this year. This expansion reflects a strategic move to enhance production capabilities in response to surging demand from major clients like Nvidia and to counter rising competition in the semiconductor market.

The establishment of VisionPower Semiconductor not only signifies a pivotal growth opportunity for the semiconductor industry in Singapore but also heralds a new era of innovation and job creation in the region. As global demand for semiconductors continues to rise, this new venture places Singapore at the forefront of technological advancement and economic development in the semiconductor sector.