VIS and NXP to Establish a Joint Venture to Build and Operate a 300mm Fab
Vanguard International Semiconductor (VIS) and NXP Semiconductors (NXP) have announced a joint venture to create VisionPower Semiconductor Manufacturing Company (VSMC). This new venture will construct a 300mm semiconductor wafer fab in Singapore, focusing on 130nm to 40nm mixed-signal, power management, and analog products for automotive, industrial, consumer, and mobile markets. The fab, utilizing licensed technologies from TSMC, will commence construction in the second half of 2024, with production starting in 2027. The project, costing $7.8 billion, will see VIS contributing $2.4 billion for a 60% equity stake and NXP $1.6 billion for 40%. The fab aims to produce 55,000 wafers per month by 2029 and will create approximately 1,500 jobs. VIS will operate the fab, adhering to Singapore Green Mark standards.
- Creation of 1,500 jobs in Singapore
- Investment of $7.8 billion in new semiconductor fab
- Production capacity of 55,000 wafers per month by 2029
- Strategic alignment with long-term growth objectives for both VIS and NXP
- Green manufacturing measures adhering to Singapore Green Mark standards
- Focus on high-demand markets: automotive, industrial, consumer, and mobile
- Assured proportional capacity to both equity partners
- Licensed advanced process technologies from TSMC
- Potential for a second phase pending successful initial ramp-up
- Joint venture enhances geographic resilience and supply control for NXP
- High initial investment of $7.8 billion, with significant financial commitments from VIS and NXP
- Long timeline before production start in 2027
- Dependence on regulatory approvals before commencing construction
- Potential risk of delays impacting launch timelines and financial returns
- Financial risks associated with third-party funding and loans
Insights
From a financial analyst perspective, the joint venture between Vanguard International Semiconductor Corporation (VIS) and NXP Semiconductors N.V. (NXP) to establish a 300mm semiconductor wafer manufacturing facility is a significant development. The total investment of
The expected monthly output of 55,000 300mm wafers by 2029 is noteworthy, given the global semiconductor shortages and rising demand for mixed-signal, power management and analog products. This capacity aligns well with VIS and NXP's target markets, including automotive, industrial, consumer and mobile sectors, all of which are seeing increasing semiconductor usage.
From a financial stability standpoint, the joint venture will receive funding from third-party loans, which could leverage financial flexibility. However, investors should monitor the debt structure and repayment terms to ensure it does not overly strain the partners' balance sheets. The timeline and regulatory approvals remain important factors to watch, as any delays could impact financial projections.
The creation of around 1,500 jobs in Singapore is a positive socio-economic impact, though it will also necessitate significant operational management and labor costs. The adherence to Singapore Green Mark standards will be a beneficial factor in the long run, potentially reducing operational costs and aligning with global sustainability trends.
From a technical standpoint, the decision to focus on 130nm to 40nm mixed-signal, power management and analog products is strategic. These nodes are important for the targeted end markets, especially in automotive and industrial applications where reliability and performance at mature nodes are still highly valued. Licensing and technology transfer from TSMC adds a layer of technical credibility and experience, ensuring that the fab will start with proven and reliable processes.
The timeline for construction and production, starting in 2024 with customer deliveries anticipated by 2027, shows a comprehensive and well-thought-out planning phase. However, the actual execution will be key, as semiconductor manufacturing projects can encounter unforeseen technical and logistical challenges.
The use of a 300mm wafer size is significant because it allows for higher volume production and cost efficiencies compared to smaller wafer sizes. This is particularly important for mixed-signal and power management products that are expected to see growing demand in automotive and industrial markets. However, achieving the anticipated output of 55,000 wafers per month will require precise calibration and state-of-the-art manufacturing equipment, which should be closely monitored.
HSINCHU, Taiwan and EINDHOVEN, The Netherlands, June 05, 2024 (GLOBE NEWSWIRE) -- Vanguard International Semiconductor Corporation (“VIS”, TPEx 5347) and NXP Semiconductors N.V. (“NXP”, NASDAQ: NXPI) today announce the plan to create a manufacturing joint-venture VisionPower Semiconductor Manufacturing Company Pte Ltd (“VSMC”) which will build a new 300mm semiconductor wafer manufacturing facility in Singapore. The joint-venture fab will support 130nm to 40nm mixed-signal, power management and analog products, targeting the automotive, industrial, consumer and mobile end markets. The underlying process technologies are planned to be licensed and transferred to the joint venture from TSMC.
The joint venture will begin construction of the initial phase of the wafer fab in the second half of 2024, pending receipt of all required regulatory approvals, with initial production available to customers during 2027. The joint venture will operate as an independent, commercial foundry supplier, providing assured proportional capacity to both equity partners, with an expected output of 55,000 300mm wafers per month in 2029. The joint venture will create approximately 1,500 jobs in Singapore. Upon the successful ramp of the initial phase, a second phase will be considered and developed pending commitments by both equity partners.
The total cost of the initial build out is anticipated to be
“VIS is pleased to work with leading global semiconductor company NXP to build our first 300mm fab. This project aligns with our long-term development strategies, demonstrating VIS’ commitment to meeting customer demands, and diversifying our manufacturing capabilities,” said VIS Chairman Leuh Fang. “Adhering to the vision of business sustainability, this fab will be built adopting the Singapore Green Mark standards and implementing rigorous green manufacturing measures. We will continue to create great value for our stakeholders and look forward to working with customers, suppliers, local talents, and government to continuously contribute to Singapore and the global semiconductor ecosystem.”
“NXP continues to take proactive actions to ensure it has a manufacturing base which provides competitive cost, supply control, and geographic resilience to support our long-term growth objectives,” said Kurt Sievers, NXP President and CEO. “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. The joint venture partnership we intend to create with VIS perfectly aligns within NXP’s hybrid manufacturing strategy.”
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 279,000 wafers in 2023.
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. (NASDAQ: NXPI) 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 Investor Relations: | VIS Public Relations: |
| Janey Liu | Hui-Chung Su |
| cyliuc@vis.com.tw | hcsuc@vis.com.tw |
| 886-3-5770355 | 886-3-5770355 #1901 |
| NXP Investor Relations: | NXP Public Relations: |
| Jeff Palmer - Global | Paige Iven – Americas and EU |
| jeff.palmer@nxp.com | paige.iven@nxp.com |
| +1 408 205 0687 | +1 817 975 0602 |
| Jenny YC Chen – Asia Pacific | |
| jenny.yc.chen@nxp.com | |
NXP-CORP
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