VSMC Opens $7.8B Singapore Fab at Sold-Out Capacity — and Is Already Weighing a Second Plant

VisionPower Semiconductor Manufacturing Co. opened its first 12-inch wafer fab in Singapore on Monday — a $7.8 billion plant in Tampines built in about 22 months — and its chairman said the venture is already evaluating a second factory, the clearest signal yet from inside the foundry industry that the artificial-intelligence-driven chip shortage will outlast the current wave of new capacity.

"We should have built two fabs here simultaneously"

"The supply shortage will persist for some time. We should have built two fabs here simultaneously," Fang said in an interview with Bloomberg.

Fang said the second plant could adopt more advanced process technology than the first fab — a notable step for a venture built on mature specialty nodes — but he declined to put a number on it. "It's too early to discuss budget because we haven't decided which technology to adopt. Different technologies mean very different total investment scales," he said.

Sweden's TT News Agency, carrying the same Bloomberg interview, quoted Fang as saying it was "too early to talk about a budget as we haven't decided on the technology to be used" for a second plant.

In practical terms, the remark reframes the shortage from a cyclical blip into a planning constraint: a brand-new fab, sold out before it has shipped a single wafer at volume, is already not enough. For investors tracking the durability of artificial-intelligence capital spending, that is the supply side confirming what the demand side has been saying.

Sold out before volume production

The Tampines plant has moved into risk production after its first sample lot delivered yields above 99%, with volume manufacturing scheduled for the first quarter of 2027.

At full capacity, which VSMC expects to reach by 2029, the plant should produce roughly 44,000 12-inch wafers a month and employ about 1,600 people.

The first batch of 40-nanometer wafers rolled off the line in June with yields above 99%, and the entire first phase of capacity is already pre-sold.

The plant will run 130-nanometer to 40-nanometer processes spanning mixed-signal, power management, analog and interposer technologies for automotive, industrial, consumer, mobile and high-performance computing customers, according to the release.

A Vanguard–NXP venture built for geographic resilience

Bloomberg described the venture as coming from Taiwan Semiconductor Manufacturing Co.'s "smaller affiliate" Vanguard International Semiconductor.

VSMC — VisionPower Semiconductor Manufacturing Co. — is the joint venture between Vanguard International Semiconductor and Dutch chipmaker NXP Semiconductors, established in September 2024. Fang chairs both VSMC and Vanguard.

NXP chief executive Rafael Sotomayor said the fab "enhances our geographic resilience, supply control, and cost competitiveness, while advancing our differentiated hybrid manufacturing strategy."

Fang also credited TSMC with critical support during construction — technology transfer and employee training — a reminder of how closely the world's largest foundry stands behind its affiliate's overseas expansion.

Singapore's second semiconductor wave

United Microelectronics has already brought its new $5 billion first-phase fab at Singapore's Pasir Ris wafer park into volume production this year, lifting its Singapore output to more than one million wafers annually.

The plant runs the company's 22- and 28-nanometer processes — billed at its unveiling as the most advanced foundry processes in Singapore — and is expected to create roughly 700 local jobs.

Taken together, the two projects point to a second wave of semiconductor investment in Singapore — driven less by mature-node and assembly-and-test work than by artificial-intelligence demand, and by Taiwanese foundry players turning geographic diversification from an optional strategy into a mandatory one.

What remains unknown is the technology node for the second plant — and therefore its budget — plus the timing of any decision. Fang gave no date, and VSMC's first fab has yet to reach volume production. What is no longer in question is the industry's operating assumption: the foundries are building as if the shortage is structural, not cyclical.