Asia Tech Wire (June 5) -- Netherlands-based chipmaker NXP Semiconductors N.V. and a TSMC-backed chipmaker plan to invest $7.8 billion to build a factory in Singapore.

Vanguard International Semiconductor (VIS), a contract chipmaker in which TSMC holds a 28.3% stake, announced Wednesday that it plans to set up a joint venture, VisionPower Semiconductor Manufacturing Company (VSMC), in Singapore with NXP to build its first 12-inch wafer fab.

VSMC will be an independent wafer manufacturing services provider, offering a certain percentage of capacity for both partners.

The fab, which VIS will operate, will utilize 130nm to 40nm technology for mixed-signal, power management and analog products targeting the automotive, industrial, consumer and mobile markets.

VIS said the relevant technology licenses and technology transfers will come from its largest corporate shareholder, TSMC.

The 12-inch fab investment is around $7.8 billion, with VIS injecting $2.4 billion for a 60% stake in the joint venture, while NXP will contribute $1.6 billion for a 40% stake.

The two sides have committed an additional $1.9 billion to support long-term capacity, with the rest of the funding (including loans) coming from third parties in the joint venture.

VSMC plans to begin construction of its first fab in the second half of 2024 and expects to begin mass production here in 2027, with an estimated monthly capacity of 55,000 12-inch wafers in 2029, creating approximately 1,500 jobs.

Meanwhile, after the successful mass production of the first fab, the two companies will consider the construction of the second fab.