Vanguard evaluating plan for second Singapore fab

Contract chipmaker Vanguard International Semiconductor Corp (世界先進) yesterday said it is seriously evaluating new capacity expansions at a new 12-inch fab in Singapore in a bid to address increasing customer demand ahead of schedule.The company’s remarks came as the first-phase capacity has been fully reserved and covered by long-term supply agreements as some customers seek to diversify chip sourcing to hedge against geopolitical risks. As a result, the fab is highly likely to reach 100 percent utilization in 2028 rather than in 2029, Vanguard said. The fab is operated by VisionPower Semiconductor Manufacturing Co, a joint venture with NXP Semiconductors NV. The Singapore fab is set to enter volume production in the first quarter of next year, or could ramp up production earlier than scheduled as construction progresses smoothly, Vanguard said yesterday. More than 200 manufacturing tools have been moved into the clean room for installation, it said. “We originally did not plan to assess the second-phase expansion project until 2029, when we finish the first-phase capacity buildup at the fab,” Vanguard chairman Leuh Fang (方略) told reporters in Taipei yesterday. “As some customers have shown demand increases, we have to seriously evaluate the feasibility of building a second fab.” Vanguard would carefully evaluate the expansion plan to prevent lower utilization from diluting gross margin, Fang said.The phase-two facility would be similar to the phase-one fab, which would have an installed capacity of 44,000 12-inch wafers per month, Fang said.The new 12-inch factory would concentrate on producing chips on mature process nodes such as 0.13-micron and 40-nanometer technologies rather than pursuing advancement to cutting-edge nodes, Vanguard said.Asked if Vanguard is considering adopting more advanced 22-nanometer or 28-nanometer technology, Fang said he would “not say never.”The company utilizes mature and specialty processing technologies to produce power management chips and chips used in cars and industrial devices at the new fab as it does at its 8-inch fabs. Vanguard would utilize the Singapore fab to produce silicon interposers for a major customer using consigned manufacturing equipment from next year. The new business is expected to help propel factory loadings and the bottom line, company chief financial officer Amanda Huang (黃惠蘭) said.Silicon interposers are an essential part of advanced packaging technology, or chip-on-wafer-on-substrate technology, used to package artificial intelligence chips. In addition to 12-inch capacity expansion, Vanguard is also boosting 8-inch wafer capacity to meet customer demand, it said.