Investing.com -- A speciality contract chipmaker partially-owned by Taiwan Semiconductor Manufacturing Company (TW:2330) has teamed up with NXP Semiconductors (NASDAQ:NXPI) in the Netherlands to create a joint-venture that will build a new $7.8 billion wafer facility in Singapore.
Vanguard International Semiconductor Corporation, which is 60% owned by TSMC, the world's biggest contract chipmaker, said in a joint statement with NXP that the plant will be able to supply products to the automotive, industrial, consumer and mobile industries.
The initial phase of construction is due to begin in the second half of 2024, pending regulatory approvals, the companies said. Customers will be able to access wafers -- the thin slices of material used in microchips -- manufactured at the facility "during 2027", they added.
Under the plan, Vanguard will inject $2.4 billion, or 60% of the equity position in the joint-venture. NXP will provide the remaining 40%, worth $1.6 billion.
The firms added that they have also agreed to contribute an additional $1.9 billion to support "long-term capacity infrastructure." The rest of the funding will come from third parties to the joint-venture.
Tuesday's announcement comes as semiconductor groups in Taiwan are looking to broaden their operations beyond the island in a bid to hedge against risks posed by a rivalry between the U.S. and China over the development of cutting-edge technology.