Vanguard International Semiconductor Corporation (VIS) and NXP Semiconductors N.V. NXPI plan to spend up to $7.8 billion on a new semiconductor facility in Singapore.

VIS will contribute $2.4 billion, securing a 60% equity stake in the initiative. NXP will invest $1.6 billion for a 40% stake. An additional $1.9 billion from both companies will support long-term capacity.

The joint venture — known as VisionPower Semiconductor Manufacturing Company Pte Ltd (VSMC) — will seek third-party funding, including loans, to cover the remaining costs. VIS will manage the fab’s operations.

The new venture is set to generate around 1,500 jobs in Singapore. It will develop a 300mm semiconductor wafer manufacturing facility, focusing on 130nm to 40nm mixed-signal, power management, and analog products for automotive, industrial, consumer, and mobile markets.

NXP CEO Kurt Sievers praised VIS for understanding “the complexities involved in building and operating together with NXP a 300mm analog mixed signal fab.”

The technology for the project will be licensed from Taiwan Semiconductor Mfg. Co. Ltd (TSMC) TSM, which partially owns Vanguard.

This venture will mark Vanguard’s entry into the more advanced 12-inch wafer technology, leveraging TSMC’s expertise, the world’s leading contract chip maker, reported the Wall Street Journal.

NXP, a major supplier to the automotive sector, will benefit from this expansion, as the automotive industry comprises over half of its revenue.

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Construction for the first phase of the wafer fab is expected to begin in 2024.

Production is expected to start in 2027. VSMC aims for an estimated output of 55,000 300mm wafers per month by 2029.

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

The initiative aligns with Taiwanese chipmakers’ broader strategy to diversify geographically amid the escalating tech rivalry between the U.S. and China.

United Microelectronics Corp. UMC Taiwan’s second-largest chip maker, recently announced a $5 billion investment in a new factory in Singapore.

TSMC has also expanded with new plants in Japan and the U.S., receiving up to $6.6 billion from the U.S. government to support its $65 billion investment in Arizona factories.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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