• NXP and VIS will establish a joint venture, VSMC Pte Ltd., to build the new fab, which will produce chips from 300-nanometer wafers, the industry’s most advanced type.
  • The facility will also manufacture mixed-signal processors, which are semiconductors blending analog circuits with transistors capable of performing computations.

NXP Semiconductors NV and VIS Corp. have recently unveiled intentions to construct a new chip fabrication facility, or fab, in Singapore, with an estimated investment of USD 7.8 billion.

The facility is anticipated to commence operations in 2027. Upon becoming operational, it will have the capacity to manufacture over 50,000 silicon wafers’ worth of chips monthly.

Netherlands-based NXP plays a vital role as a semiconductor supplier for the automotive sector. The company uses a network of in-house fabs to produce chips that are used in motors, infotainment systems, and a variety of other automotive components. NXP produces processors for a variety of markets, such as the data center networking industry.

VIS, a chip foundry based in Taiwan, operates five semiconductor plants with a combined capacity of approximately 279,000 wafers per month. In some instances, each wafer can be transformed into hundreds of chips.

NXP and VIS are forming a joint venture, VSMC Pte Ltd., to establish the new fab. This facility will produce chips from 300-millimeter wafers, the most advanced wafers in the semiconductor industry. The fab’s production lines will utilize manufacturing processes ranging from 130 nanometers to 40 nanometers.

The plant’s processes will be several generations behind the three-nanometer technology used for the industry’s fastest processors. However, such cutting-edge nodes are often unnecessary for the types of semiconductors that NXP and VIS plan to produce. The companies have specified that their new fab will primarily focus on manufacturing analog and mixed-signal chips.

Analog chips are generally not used for computing tasks like running applications. Instead, they perform auxiliary functions, such as filtering interference from wireless signals received by a handset’s Wi-Fi module. Additionally, analog chips are employed for various other tasks, from managing device sensors to monitoring network reliability.

Another significant application of this technology is power management. Analog power management chips regulate the flow of electricity in computers as well as other systems, such as electric cars. NXP and VIS have indicated that producing these chips will be a primary focus for their new fab.

Additionally, the plant will manufacture mixed-signal processors, which are semiconductors that integrate transistors with analog circuits and can perform calculations. These chips are utilized for tasks such as converting measurements from a smartphone’s sensors into a digital format that its processor can interpret.

VIS intends to invest USD 2.4 billion in the fab and will receive a 60% stake in VSMC, the joint venture responsible for constructing the facility. NXP will contribute USD 1.6 billion in return for the remaining 40% stake. Furthermore, both companies will each invest an additional USD 1.9 billion to bolster “long-term capacity infrastructure.”

The remaining portion of the project’s USD 7.8 billion construction cost will be financed through loans from third parties. Moreover, the joint venture will obtain a license for the “underlying process technologies” utilized in chip production from Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), a company with a 28% stake in VIS.

Later this year, the fab’s construction is scheduled to start. The plant is anticipated to begin chip production in 2027 and reach a monthly production capacity of 55,000 wafers by 2029. NXP and VIS plan to market these chips to companies in the automotive, industrial, consumer hardware, and mobile device sectors.