The semiconductor component market’s push for supply chain diversification has birthed unexpected alliances. A manifestation of this is the recent decision of European semiconductor firm NXP Semiconductors NV and Vanguard International Semiconductor Corp to jointly invest $7.8 billion in constructing a new chip manufacturing factory in Singapore.
Singapore boasts a robust semiconductor industry. Leading chip production companies operate within its borders. Although NXP is a familiar name to electronics consumers, VIS is less well-known, despite often being mentioned in rankings of top contract chip manufacturers. However, VIS enjoys a beneficial relationship with the world’s leading player in the market, Taiwan’s TSMC, which holds a 28% stake in VIS. This association offers VIS not just vital technology to be implemented in the new factory, but also access to skilled personnel who will travel to Singapore to set up the equipment and construct the facility.
Construction is set to commence in the second half of this year, with production scheduled to start in 2027. The Singapore plant will provide NXP with power electronics for electric vehicles, analog components, and chips for industrial equipment and consumer electronics. In the joint venture, 60% will be owned by Vanguard, with the remaining shares going to NXP. Initially, the site will use 300mm silicon wafers, with lithography ranging from 130 to 40 nm.
In the initial phase, Vanguard will invest $2.4 billion into the project, with NXP’s contribution capped at $1.6 billion. Both companies are expected to add a further $1.9 billion each. The formal employer for the approximately 1,500 employees at the new facility will be Vanguard. Notably, both companies already have a presence in Singapore. Vanguard acquired a factory from GlobalFoundries in 2019, while NXP has partnered with TSMC. Thus, neither company is unfamiliar with operating in Singapore. GlobalFoundries, Micron, and Infineon also have facilities in Singapore.
