NXP and Vanguard Partner with TSMC for VSMC 300mm Legacy Fab

NXP Semiconductor and Vanguard International Semiconductor (VIS) have announced a strategic partnership to utilize TSMC process technology for a joint venture 300mm fab named VisionPower Semiconductor Manufacturing Company (VSMC). This collaboration aims to enhance the production of power management and mixed signal devices ranging from 40nm to 130nm for NXP customers and VIS foundry customers starting in 2027.

The $10 billion VSMC fab, located in Singapore, is a significant step towards meeting the growing demand for semiconductor manufacturing capacity. With 17 new fabs expected to come online next year, the industry is gearing up for record fab capacity. This move also signifies a shift in focus for legacy fabs, as TSMC repurposes its 200mm facilities to cater to the rising need for chiplet assembly using advanced processes like CoWoS and InFO.

NXP's investment of $1.6 billion secures a 40% dedicated share of the monthly wafer production for automotive and industrial devices by 2029. On the other hand, VIS is funding the majority share of 60% with $2.4 billion to support its foundry business and will oversee the operation of the fab. This strategic allocation of resources ensures that both partners have the necessary capacity to meet their specific market demands.

Moreover, NXP's involvement in TSMC's upcoming European fab, ESMC, further solidifies its position in the semiconductor industry. ESMC, set to commence operations in 2027, will leverage cutting-edge FINFET logic technology, enhancing NXP's technological capabilities and market competitiveness.

The construction of the initial phase of the VSMC wafer fab is scheduled to begin in the second half of 2024, subject to regulatory approvals. Customers can expect initial production to be available by 2027. The joint venture will function as an independent commercial foundry supplier, offering proportional capacity to both equity partners. Plans for a second phase are contingent on commitments from both partners and an additional $1.9 billion in funding.

In a statement, VIS Chairman Leuh Fang expressed enthusiasm about the collaboration, emphasizing VIS's commitment to meeting customer needs and expanding manufacturing capabilities. The project aligns with VIS's long-term strategies and underscores its dedication to sustainable business practices, including adherence to Singapore Green Mark standards and green manufacturing initiatives.

NXP President and CEO Kurt Sievers highlighted the importance of establishing a robust manufacturing base to support the company's growth objectives. He praised VIS's expertise in analog mixed signal fab construction and operation, emphasizing the alignment of the joint venture with NXP's hybrid manufacturing strategy. The partnership aims to enhance cost competitiveness, supply chain resilience, and geographic diversity to drive long-term success.

With VIS's existing fabs in Taiwan and Singapore boasting a combined monthly capacity of approximately 279,000 wafers in 2023, the joint venture with NXP represents a significant expansion of VIS's manufacturing footprint. By leveraging TSMC process technology and combining the strengths of both companies, VSMC is poised to play a pivotal role in meeting the evolving demands of the semiconductor market.

Sources: www.nxp.com, www.vis.com.tw