Vanguard to expedite Singapore fab

EXPANSION: The Singapore fab has the potential to break even earlier than anticipated, with full capacity utilization projected ahead of the 2029 schedule, Vanguard said

• By Lisa Wang / Staff Reporter, SINGAPORE

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Foundry service provider Vanguard International Semiconductor Corp (世界先進) said it is fast-tracking the timeline for its second fab in Singapore, after holding a grand opening ceremony for its first 12-inch wafer fab yesterday.

The new fab, operated by VisionPower Semiconductor Manufacturing Co Pte Ltd (VSMC), a joint venture between Vanguard and NXP Semiconductors NV, will support process technologies ranging from 130 nanometer to 40 nanometer for mixed-signal, power management, analog and interposer applications. An interposer is a critical component used in advanced chip-on-wafer-on-substrate packaging, the company said.

As robust artificial intelligence (AI) demand squeezes non-AI manufacturing capacity, the demand for specialty node chips “has gone through the roof,” Vanguard and VSMC chairman Fang Leuh (方略) said.

From left, NXP Semiconductors NV CEO Rafael Sotomayor, Singaporean Minister for Trade and Industry Tan See Leng and Vanguard International Semiconductor Corp chairman Fang Leuh hold 12-inch wafers at an opening ceremony of VisionPower Semiconductor Manufacturing Co Pte Ltd’s first 12-inch fab in Tampines, Singapore, yesterday.

Photo: CNA

That has caused a chip supply crunch, which is expected to persist for a long time, he said.

“We really should have just built both fabs at the same time,” Fang said, adding that there has been additional chip demand from customers.

VSMC held a groundbreaking ceremony for the first fab in December 2024.

As the fab’s phase 1 capacity is entirely allocated, additional demand will be accommodated in phase 2 expansion, he said.

However, the company would not rush a decision, he said, after being asked if the expansion plan would be finalized by the end of this year.

To support such a capital-intensive 12-inch fab project, the company is carefully structuring its financial strategy and evaluating future product applications and technology portfolios, including 28-nanometer or 22-nanometer technologies, Fang said.

The company is evaluating whether to develop 28-nanometer or 22-nanometer technologies internally or license them, as licensing provides a faster route to scale production, he said.

More than 10 customers have visited the Singapore site and discussed their future demand and capacity requirements, he said.

Regarding debate about a slowdown in AI investment, he said that AI’s trajectory is “unstoppable and irreversible,” and that a future slowdown in growth would not leave foundry capacity idle.

Progress at the VSMC fab has exceeded expectations, Fang said.

Risk production is likely to commence in the next quarter, maintaining the timeline for mass production in the first quarter of next year, he said.

The fab has the potential to break even earlier than anticipated, with full capacity utilization projected ahead of the 2029 schedule, he said.

The fab is expected to produce about 44,000 12-inch wafers per month, and create about 1,600 jobs, the company said.

“The opening of this new fab represents a long-term commitment to strengthening the global semiconductor ecosystem, enhancing supply chain resilience and creating the capacity needed to support the technologies that will define our future,” NXP CEO Rafael Sotomayor said yesterday.

The facility would serve not only as a catalyst for innovation, but also as a catalyst for developing the industry’s next generation of engineering talent, creating opportunities for skills development and contributing to Singapore’s growing semiconductor ecosystem, Sotomayor said.

The investment in the VSMC fab is one of the most significant milestones in NXP’s history, he said, adding that it is also the largest investment NXP has made since its acquisition of Freescale in 2015.