- Vanguard International Semiconductor (VIS) has plans to build its first 12-inch chip plant in Singapore, aiming to capture the demand for automotive-related chips.
- This move follows VIS’s acquisition of an 8-inch chip plant in Singapore in 2019, and the new plant could incur investments of up to S$2 billion.
- The decision to run operations in Singapore is driven by the increasing demand for mature chip supplies outside of China and ongoing geopolitical tensions.
Nikkei reports that Vanguard International Semiconductor (VIS), an affiliate of Taiwan Semiconductor Manufacturing Co. (TSMC), is considering setting up its most advanced chip plant in Singapore, specifically focusing on 12-inch chip production.
This is set to tap into the robust demand expected for mature chips used in automobiles and other electronics, while also meeting the need for capacity diversification in various locations.
Historical Outlook and Current State of Chip Manufacturing in Singapore
The semiconductor industry in Singapore has come a long way.
It has grown from producing simple chips to advanced ones.
Several global chip manufacturers have set up factories here.
GlobalFoundries, for instance, just opened a S$4 billion plant.
This new plant is expected to produce 450,000 wafers annually by 2025 to 2026.
It will increase the city-state’s overall capacity to about 1.5 million wafers per year.
Why Singapore? The Benefits and Challenges
Singapore offers many benefits for chip manufacturers.
Its stable geopolitics, skilled workforce, and supportive business policies are attractive.
However, limited resources like land, water, and electricity present hurdles.
Still, companies like VIS see Singapore as a viable place for plants.
So much so, TSMC Founder Morris Chang named Singapore, alongside Japan, as ideal locations for global chip market expansion.
An In-depth Look at VIS’s Planned Expansion
VIS has its eyes set on a 12-inch chip plant.
The potential investment? Nothing less than S$2 billion.
The focus? Manufacturing mature, long-lasting chips for automobiles and industrial applications.
The location will be close to the 8-inch chip plant acquired in 2019.
This move is part of a larger strategy to foster a more resilient supply chain.
It caters to the increasing demand for mature chip supplies outside of mainland China.
Geopolitical Tensions Influencing Chip Manufacturing
Geopolitical stress, particularly between the US and China, affects the global chip supply chain.
It has pushed companies to explore opportunities in places like Singapore.
“VIS also sees increasing demand for mature chip supplies in places outside of China due to geopolitical tension,” said one supply chain executive.
Outlook: The Future of This Venture and Its Impact on the Semiconductor Market
This move by VIS could bring about significant changes.
It could reshape both the local and global chip market.
But more importantly, it could spell a bright future for Singapore’s economy.
With the increasing demand for microchips in various sectors, this could lead to wealth creation and job opportunities for Singapore.
It could also secure the city-state’s spot as a hub for advanced chip manufacturing in South-East Asia.
Riding on this wave of expansion, what will the regional and global semiconductor industry look like in the years to come?