VIS and NXP Announce Establishment of VSMC Joint Venture
Rhea-AI Summary
VIS and NXP have officially established the VisionPower Semiconductor Manufacturing Company (VSMC) joint venture in Singapore, following regulatory approvals. The venture will construct a 300mm wafer manufacturing facility with a total investment of $7.8 billion. Construction is set to begin in the second half of 2024, with initial production starting in 2027.
The fab will support 130nm to 40nm mixed-signal, power management, and analog products for automotive, industrial, consumer, and mobile markets. TSMC will provide technology licensing and transfer. By 2029, the facility aims to produce 55,000 300mm wafers per month and create 1,500 jobs, contributing to Singapore's and the global semiconductor ecosystem.
Positive
- Joint venture establishment with $7.8 billion investment
- New 300mm wafer manufacturing facility in Singapore
- Production capacity of 55,000 300mm wafers per month by 2029
- Creation of 1,500 new jobs
- Expansion of manufacturing capacity and global diversification
- Technology license agreement with TSMC
Negative
- Initial production not starting until 2027
- Significant capital expenditure required
Insights
The establishment of VSMC, a
- For VIS, it expands manufacturing capacity and diversifies global production bases.
- For NXP, it aligns with their hybrid manufacturing strategy, enhancing supply control and geographic resilience.
The fab's focus on 130nm to 40nm processes for mixed-signal, power management and analog products targets high-growth sectors like automotive and industrial. With production slated for 2027 and full capacity of 55,000 wafers per month by 2029, this investment positions both companies for long-term growth in key markets. However, investors should note the long lead time before realizing returns on this substantial capital expenditure.
The VSMC joint venture represents a strategic move in the semiconductor industry, addressing several key technological and market trends:
- The focus on 300mm wafers improves cost efficiency and aligns with industry standards for advanced manufacturing.
- The 130nm to 40nm process nodes are important for mixed-signal and analog products, which are in high demand for automotive and IoT applications.
- Leveraging TSMC's technology through licensing ensures access to proven manufacturing processes, potentially reducing ramp-up time and technical risks.
This fab will help meet the growing demand for specialized semiconductors in emerging technologies like electric vehicles and smart devices. The investment in Singapore also diversifies the global semiconductor supply chain, which is critical given recent geopolitical tensions affecting the industry.
The VSMC joint venture is a strategic response to current market dynamics in the semiconductor industry:
- It addresses the global chip shortage by adding significant capacity, especially in analog and mixed-signal chips important for automotive and industrial sectors.
- The location in Singapore diversifies the global semiconductor supply chain, reducing geopolitical risks.
- The creation of 1,500 jobs and development of local supply chains aligns with Singapore's economic goals, likely ensuring strong government support.
This move positions VIS and NXP to capitalize on the growing demand for specialized chips in emerging technologies. However, investors should monitor potential market shifts during the long lead time to production, as well as the execution risks associated with such a large-scale project.
VSMC to begin construction of 300mm fab in second half of 2024
HSINCHU, Taiwan and EINDHOVEN, The Netherlands, Sept. 04, 2024 (GLOBE NEWSWIRE) -- Vanguard International Semiconductor Corporation (VIS, TPEx 5347) and NXP Semiconductors N.V. (NXP, NASDAQ: NXPI) today announced that they have obtained all necessary approvals from relevant authorities and injected capital to officially establish the VisionPower Semiconductor Manufacturing Company Pte Ltd (VSMC) joint venture. The company will now proceed with the planned construction of VSMC’s first 300mm wafer manufacturing facility.
VIS and NXP announced on June 5 this year plans to establish the VSMC joint venture in Singapore to build a 300mm wafer fab with a total investment of approximately
“We express our gratitude to the governments and regulatory authorities of Taiwan, Singapore, and other countries for their strong support, which enabled us to obtain the necessary approvals and proceed with this significant investment as scheduled,” said VIS Chairman Leuh Fang. “VSMC’s first 300mm fab is a concrete manifestation of VIS’ commitment to meeting customer demands, expanding our manufacturing capacity, and diversifying our global manufacturing bases.”
"We thank all the relevant government agencies for moving with speed to support the VSMC joint venture project,” said NXP President and CEO Kurt Sievers. “The VSMC fab perfectly aligns with our hybrid manufacturing strategy and helps ensure we have a manufacturing base which delivers competitive cost, supply control and geographic resilience to support our long-term growth objectives.”
VSMC will begin construction on its initial phase of the wafer fab in the second half of this year, with initial production slated to begin in 2027. Upon the successful ramp of the initial phase, a second phase will be considered and developed pending commitments by VIS and NXP. The 300mm fab will support 130nm to 40nm mixed-signal, power management and analog products, targeting the automotive, industrial, consumer and mobile end markets. The related technology license and technology transfer will be from TSMC, and a Technology License Agreement with TSMC has been signed. With an expected output of 55,000 300mm wafers per month in 2029, the joint venture will create approximately 1,500 jobs while contributing to the development of the upstream and downstream supply chains, contributing to Singapore and the global semiconductor ecosystem.
About VIS
Vanguard International Semiconductor Corporation (VIS) is a leading specialty IC foundry service provider. Since its inception in 1994 in Hsinchu Science Park, Taiwan, VIS has been achieving continuous success in its technology development and production efficiency improvement. VIS has also been consistently offering its customers cost-effective solutions and high value-added services. VIS has five 8-inch fabs in Taiwan and Singapore with a monthly capacity of about 282,000 wafers in 2024.
VIS has a total of over 6,000 employees. We are committed to adhering to our customer-oriented business philosophy to provide customers continuously improved and enhanced specialty IC foundry services. To better serve our worldwide customers, VIS has established sales offices in Taiwan and sales representatives in main IC clusters around the world.
About NXP Semiconductors
NXP Semiconductors N.V. is the trusted partner for innovative solutions in the automotive, industrial & IoT, mobile, and communications infrastructure markets. NXP's "Brighter Together" approach combines leading-edge technology with pioneering people to develop system solutions that make the connected world better, safer, and more secure. The company has operations in more than 30 countries and posted revenue of
For further information, please contact:
| VIS Spokesperson: Amanda Huang Vice President & CFO pr@vis.com.tw 886-3-5770355 | VIS Public Relations: Hui-Chung Su hcsuc@vis.com.tw 886-3-5770355 #1901 | |
| NXP Investor Relations: Jeff Palmer - Global jeff.palmer@nxp.com +1 408 205 0687 | NXP Public Relations: Paige Iven – Americas and EU paige.iven@nxp.com +1 817 975 0602 | |
| Jenny YC Chen – Asia Pacific jenny.yc.chen@nxp.com | ||
NXP-CORP
FAQ
What is the total investment for the VSMC joint venture between VIS and NXP?
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