NXP & VIS to Establish $7.8B Semiconductor Venture

VIS and NXP have announced their plan to establish a joint venture, VisionPower Semiconductor Manufacturing Company Pte Ltd ("VSMC"), which will construct a new 300mm semiconductor wafer manufacturing facility in Singapore. The joint venture is expected to support 130nm to 40nm mixed-signal, power management, and analog products, catering to the automotive, industrial, consumer, and mobile end markets.

The joint venture aims to begin construction of the initial phase of the wafer fab in the second half of 2024, with initial production available to customers during 2027. It is projected to operate as an independent, commercial foundry supplier, providing assured proportional capacity to both equity partners. The expected output is 55,000 300mm wafers per month in 2029, creating approximately 1,500 jobs in Singapore.

The total cost of the initial build-out is anticipated to be $7.8 billion. VIS will inject $2.4 billion, representing a 60 percent equity position, while NXP will inject $1.6 billion for the remaining 40 percent equity position. Additionally, VIS and NXP have agreed to contribute an additional $1.9 billion, which will be utilized to support the long-term capacity infrastructure.

VIS, a leading specialty IC foundry service provider, currently operates five 8-inch fabs in Taiwan and Singapore with a monthly capacity of about 279,000 wafers in 2023. The company has a total of over 6,000 employees.

On the other hand, NXP Semiconductors N.V., a trusted partner for innovative solutions in various markets, posted revenue of $13.28 billion in 2023 and has operations in more than 30 countries.

The establishment of this joint venture aligns with VIS' long-term development strategies and demonstrates its commitment to meeting customer demands and diversifying its manufacturing capabilities. On the other hand, NXP believes that VIS is well suited to understand the complexities involved in building and operating a 300mm analog mixed-signal fab, aligning perfectly within NXP’s hybrid manufacturing strategy.

This joint venture signifies a significant step for both VIS and NXP as they aim to create a strong manufacturing base to support their long-term growth objectives and provide assured capacity to both equity partners. The market has reacted to these announcements by moving the company's shares 3.3% to a price of $275.01. For more information, read the company's full 8-K submission here.

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