Photo courtesy of VIS June 5, 2024

Taipei, June 5 (CNA) Taiwan-based contract chipmaker Vanguard International Semiconductor Corp. (VIS) announced Wednesday the company is teaming up with Netherlands-based semiconductor supplier NXP Semiconductors N.V. to establish a joint venture and build a 12-inch wafer fab in Singapore.

In a statement, VIS said both sides will establish a joint venture, called VisionPower Semiconductor Manufacturing Company Pte Ltd. (VSMC), to build a 12-inch wafer plant, which is expected to cost US$7.8 billion or about NT$252.4 billion.

VIS said it will inject US$2.4 billion to take a 60 percent stake in the fab with NXP to invest US$1.6 billion and a 40 percent share.

VIS added the two partners have agreed to contribute an additional US$1.9 billion which will be used to support long-term capacity infrastructure, with the remaining funding, such as loans, to be provided by third parties to the joint venture.

The fab will be operated by VIS, the Taiwanese contract chipmaker said.

After securing regulatory approval, VSMC is scheduled to start construction of the wafer fab in the second half of this year with mass production slated to begin in 2027, using mature 130 nanometer to 40nm technologies which will be licensed by and transferred from Taiwan Semiconductor Manufacturing Co. (TSMC).

TSMC, the world’s largest contract chipmaker, is one of the major shareholders of VIS, with a 28.32 percent stake in the smaller contract chipmaker.

Chips rolled out by the wafer fab will support applications in mixed-signal, power management and analog products, targeting the automotive, industrial, consumer and mobile end markets, VIS said.

VSMC will operate as an independent commercial foundry supplier, providing assured proportional capacity to the two equity partners, adding that monthly output of 12-inch wafers is expected to reach 55,000 units by 2029, VIS said.

The investment is expected to create about 1,500 new jobs in Singapore, the company added.

After the fab achieves mass production, the two partners will consider building a second one, VIS said,

“VIS is pleased to work with leading global semiconductor company NXP to build our first 300mm (12-inch) fab,” VIS Chairman Fang Leuh (方略) said in the statement. “This project aligns with our long-term development strategies, demonstrating VIS’ commitment to meeting customer demands, and diversifying our manufacturing capabilities.”

Fang said the fab will be built adopting Singapore Green Mark standards and implementing rigorous green manufacturing measures.

Commenting on the joint venture with VIS, Kurt Sievers, NXP President and CEO said in the statement that the company continues to take proactive actions to ensure it has a manufacturing base to provide competitive cost, supply control, and geographic resilience for its long term growth.

“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,” Sievers said. “The joint venture partnership we intend to create with VIS perfectly aligns within NXP’s hybrid manufacturing strategy.”