The small Southeast Asian city of Singapore continues to draw billions of dollars in investment within the semiconductor sector, edging into the market of larger economies in search of their share of the essential chip supply chain.
Vanguard International Semiconductor, a chipmaker backed by Taiwan Semiconductor Manufacturing Company, will join forces with Dutch company NXP Semiconductors, which is able to invest $7.8 billion in a brand new chip wafer factory in Singapore. The corporations expect to start out construction this yr and begin production in 2027.
The plant will produce sophisticated chips used for energy management functions in cars, industrial products and consumer goods, somewhat than the cutting-edge chips utilized in modern phones and data centers. The facility is predicted to create around 1,500 jobs.
A spokesman for Singapore’s Economic Development Board, a government agency aimed toward promoting the country as an investment destination, said the brand new chip three way partnership was a testament to Singapore’s “attractiveness for semiconductor manufacturing and its position as a major global semiconductor hub.”
Singapore has an extended tradition of semiconductor manufacturing, hosting its first chip factory in 1968. Electronics accounts for nearly half of the country’s manufacturing sector, which in turn contributes about 20% of the country’s GDP.
Vanguard and NXP’s investments trump previous investment commitments from other chipmakers.
Two contract chip manufacturers, GlobalFoundries and UMC, announced 4 billion dollars and 5 billion dollars investment Plans for Singapore in 2021 and 2022. Both corporations cited Singapore’s stable government and already existing semiconductor infrastructure. The country also offers tax incentives for manufacturers looking to take a position.
Chips are an increasingly sensitive commodity given the deteriorating relations between China and the US. Customers increasingly want to supply in numerous regions and the trend towards “geographic diversification is very strong,” said NXP CEO Kurt Sievers Bloomberg.
Chip manufacturers are also investing in other Southeast Asian countries. Malaysia, which already has a developed semiconductor industry, presents itself as a neutral territory for chip manufacturers who wish to avoid geopolitics.
