NXP and TSMC-Backed Vanguard Announce $7.8B Singapore Wafer Plant

NXP Semiconductor (NASDAQ:NXPI) and TSMC (NYSE:TSM) jointly announced on Thursday that TSMC-backed Vanguard International Semiconductor Corp (VSMC) and NXP will build a $7.8 billion wafer manufacturing plant in Singapore. Vanguard will have a 60% stake in the joint venture, while NXP will hold the remaining 40%. A wafer is a thin slice of semiconductor material used to manufacture microchips.

Details of the VSMC Plant

This new plant will produce wafers for automotive, industrial, consumer, and mobile markets and is projected to create around 1,500 jobs in Singapore. TSMC will license the necessary manufacturing technologies to VSMC, and construction on this plant is expected to start later this year. The plant is expected to ship wafers to consumers in 2027.

While NXP will invest $1.6 billion in the Singapore plant, Vanguard will contribute $2.4 billion. The two companies will invest an additional $1.9 billion to support the plant’s long-term capacity, with the remaining funding provided by third parties.

Vanguard expects that the new plant will diversify its manufacturing operations.

Is NXP a Good Stock to Buy?

Analysts remain cautiously optimistic about NXP stock, with a Moderate Buy consensus rating based on 14 Buys, seven Holds, and two Sells. Over the past year, NXP has surged by more than 50%, and the average NXP price target of $279.95 implies an upside potential of 1.98% from current levels.