Taiwan Semiconductor's Affiliate Fast-Tracks Singapore Plant Spurred By Geopolitics

Vanguard International Semiconductor (VIS), an affiliate of Taiwan Semiconductor Manufacturing Co. TSM, is exploring an accelerated timeline for its new $7.8 billion 300-millimeter chip plant in Singapore amid escalating geopolitical tensions and calls for supply chain diversification.

This move, driven by a surge in demand and China’s persistent threats towards Taiwan, aims to bring the facility online by late 2026, ahead of its initial mid-2027 schedule, Bloomberg reported on Saturday, citing Chairman Fang Leuh at a company event.

The joint venture with Dutch firm NXP Semiconductors NXPI is a strategic step for both companies to secure chip supply for the automotive and industrial sectors.

Also Read: Taiwan Semi Could Face More Than $1 Billion In US Penalty Over Alleged Huawei Chip Link: Reuters

Reportedly, Vanguard International Semiconductor contributed $2.4 billion, securing a 60% equity stake in the initiative, while NXP invested $1.6 billion for a 40% stake. Both companies contributed an additional $1.9 billion each. The venture aimed for an estimated monthly output of 55,000 300mm wafers by 2029.

Vanguard International Semiconductor broke ground for the Singapore facility in the fourth quarter of 2024. Fang told Bloomberg that Vanguard International Semiconductor prioritized the readiness of its first plant. He expects Vanguard International Semiconductor to grow mildly in U.S. dollar terms year-over-year in the second half.

U.S. trade policies, specifically the Trump administration’s “reciprocal” tariff plans from April 2025 (which included duties of 32%, 25%, and 24% on goods from Taiwan, South Korea, and Japan, aiming to spur U.S. manufacturing), also contributed to companies proactively stocking up on chips. While this policy was paused shortly after its announcement, it underscored the need for supply chain resilience.

Despite U.S. tariff discussions, Taiwan’s Minister of Economic Affairs, J.W. Kuo, stated in May that Taiwanese chipmakers remain largely unfazed, citing America’s significant dependence on Taiwan for expanding its chip production capabilities.

He further asserted that Taiwan Semiconductor would maintain its competitive edge for the next decade, with any tariff increases primarily impacting American customers rather than the company directly.

Price Action: TSM stock is down 1.30% at $225.59 at the last check on Monday.

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