The small city of Singapore in Southeast Asia continues to attract billions of dollars in semiconductor investment, competing with larger economies trying to carve out their own share of the crucial chip supply chain.
Vanguard International Semiconductor, a chip manufacturer backed by Taiwan Semiconductor Manufacturing Company, We will cooperate With Dutch company NXP Semiconductors to invest $7.8 billion in a new wafer factory in Singapore. The companies expect construction work to begin later this year, with production to begin in 2027.
The plant will produce mature chips, used for power management functions in automobiles, industrial products and consumer goods, rather than the cutting-edge chips used in phones and high-end data centers. The facility is expected to create about 1,500 job opportunities.
A spokesman for the Singapore Economic Development Board, a government agency focused on promoting the country as an investment destination, said the new chip joint venture is a testament to Singapore's “attractiveness for semiconductor manufacturing and its position as a critical global semiconductor node.”
Singapore has a long history in semiconductor manufacturing, hosting its first chip facility in 1968. Electronics makes up nearly half of the country's manufacturing sector, which in turn contributes about 20% to GDP.
The investment from Vanguard and NXP beats previous investment pledges from other chipmakers.
Two contract chipmakers, GlobalFoundries and UMC, Announce $4 billion and $5 billion investment Singapore plans in 2021 and 2022 respectively. Both companies cited Singapore's stable government and pre-existing semiconductor infrastructure. The state also offers tax incentives to manufacturers looking to invest.
Chips have become an increasingly prickly commodity amid deteriorating China-U.S. relations, as customers increasingly want manufacturing from different regions and the trend for “geographic diversification is very strong,” NXP CEO Curt Sievers said. Bloomberg.
Chipmakers are investing in other Southeast Asian countries as well. Malaysia, which already has a well-developed semiconductor industry, presents itself as a neutral zone for chipmakers trying to avoid geopolitics.
