Artificial intelligence may be defined by powerful GPUs, but the machines running it depend on far humbler silicon. That reality came into focus in Singapore’s Tampines district, where VSMC opened its first 12-inch chip fab on September 28, 2026.
VSMC, or VisionPower Semiconductor Manufacturing Company, is a joint venture formed in September 2024 by Vanguard International Semiconductor (VIS) and NXP Semiconductors. VIS holds 60% and NXP 40%, with contributions of $2.4 billion and $1.6 billion respectively. TSMC provided technology licences and facilities personnel.
Built in about 22 months, the $7.8 billion facility is designed to produce 44,000 wafers a month at full capacity, a target planned for 2029. It is expected to create around 1,600 local jobs.
The fab will not make headline-grabbing AI accelerators. Instead, it will run mature but highly reliable 130nm to 40nm processes for mixed-signal, power-management, analog and interposer chips serving high-performance computing, mobile, automotive, industrial and consumer markets.
These components regulate power and signals inside data centres, robots and vehicles. Without them, even the most advanced AI processors cannot function, which makes them essential to the rise of "physical AI." From cooling systems to electric vehicles, every watt depends on them.
Demand is already strong. The fab's initial capacity is fully booked, prompting VIS to evaluate a second Singapore plant. The facility is now in risk production, with volume manufacturing due in the first quarter of 2027. For NXP, the venture secures specialty capacity and geographic resilience beyond Taiwan at well under half the cost of building a comparable fab alone.
The message is clear: while AI accelerators capture the spotlight, foundational chips keep the AI economy running. With VSMC, Singapore reinforces its role as the resilient backbone of Asia's hardware supply chain and a vital link in the global semiconductor ecosystem.
