One is not enough! TSMC (TSM.US) affiliated company plans to build another wafer plant in Singapore, AI "chip shortage" drives expansion across Asia

According to reports from Zhihu Finance APP, VisionPower Semiconductor Manufacturing Co. (VSMC), a joint venture between Vanguard International Semiconductor, a smaller affiliate of TSMC (TSM.US), and NXP Semiconductors (NXPI.US) of the Netherlands, is considering building a second wafer fab in Singapore to meet continuously growing demand.

VSMC Chairman Leuh Fang said in an interview that the new VSMC plant may manufacture more advanced chips than its first factory in Singapore.

The rising demand for artificial intelligence services and the data centers that support them has led to a global semiconductor supply shortage, even as major companies like TSMC continue to expand production. This economic upcycle has prompted Taiwanese companies to establish new overseas capacities, with Singapore becoming one of the most attractive destinations for global investment.

“The supply shortage will persist for some time,” Leuh said. “We should have built two factories here at the same time.”

On Monday, VSMC held an inauguration ceremony for its first wafer fab in eastern Singapore. Construction on the plant began at the end of 2024, and the company expects to invest $7.8 billion. Leuh declined to estimate the potential cost of a second factory.

“It’s still too early to talk about a budget because we have yet to decide what technology to adopt,” he said. “Different technologies will significantly impact the total investment size.”

It is worth noting that VSMC’s expansion is not an isolated case; Singapore is experiencing a second wave of investment in the semiconductor industry. United Microelectronics Corporation (UMC.US) has invested $5 billion in a new wafer plant at its Pasir Ris facility, with commercial mass production set for 2026. The plan is to increase Singapore’s annual production capacity to 1.3 million wafers, making it UMC’s largest overseas production base. The number of employees will also double from around 1,200.