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Singapore offers substantial subsidies to entice TSMC to build 12-inch fab locally

Daniel Nenni

Daniel Nenni

Admin
Staff member
Singapore TSMC.jpg


TSMC is reportedly slowing down its new fab project in Germany, due to growing doubts about whether the pure-play foundry will receive adequate EU subsidies in light of the region's financial constraints, energy crisis, and other concerns. At the same time, the Singapore government is actively trying to persuade TSMC to locate a 12-inch fab there by offering significant incentives and subsidies, according to industry sources.

In response, TSMC said that it is still working with customers and partners to assess the feasibility of building a fab in Europe. The foundry also stated that it does not rule out the possibility of expanding into other regions, but there are currently no plans to do so.

Singapore has already made incentives available to entice foundries such as TSMC to establish local wafer fabs. This time, the government is offering substantial subsidies, such as free land, water, and electricity, as well as tax breaks and sufficient manpower, which may persuade TSMC to construct a new 12-inch fab in Singapore, the sources indicated.

Singapore is where Infineon and other European automotive IC IDMs locate their regional operations. These customers may instead agree with TSMC to establish a fab in Singapore, rather than Europe, to meet their immediate demand, the sources said.

In fact, TSMC is well-versed in Singapore. In 1998, the Taiwan-based foundry formed a joint venture with Royal Philips Electronics (now NXP Semiconductors) and EDB Investments of Singapore to build an 8-inch fab locally in Singapore. The fab began production in 2020. Dubbed SSMC, the fab is now a joint venture between NXP and TSMC after the latter two companies bought out EDB Investments' stake in 2006.

Vanguard International Semiconductor (VIS) is also considering locating a 12-inch fab in Singapore due to the country's highly appealing subsidies, according to the sources. VIS previously acquired an 8-inch fab in Singapore from Globalfoundries.

www.digitimes.com

Singapore offers substantial subsidies to entice TSMC to build 12-inch fab locally

TSMC is reportedly slowing down its new fab project in Germany, due to growing doubts about whether the pure-play foundry will receive adequate EU subsidies in light of the region's financial constraints, energy crisis, and other concerns. At the same time, the Singapore government is actively...
www.digitimes.com
 
The foundry business sure is getting a lot of attention. Singapore is one of my favorite places but it is really expensive for tourists. Not sure what the cost of living is compared to Arizona. More than Hsinchu I'm sure.
 
Daniel Nenni said:
Not sure what the cost of living is compared to Arizona.
Click to expand...
Phoenix area got more expensive recently with the median price of houses increasing nearly 2x in the last 5 years and 3x in the last 10 years (https://www.valleywidehomes.com/phoenix-home-prices-year-over-year/)... nowhere near Silicon Valley standards, but no longer an enticing consolation for those who endure the summer heat here. Silicon Valley and Phoenix area sales taxes are similar (total state/county/city sales tax in the 7-9% in Phoenix, 9 - 10% in Santa Clara County).

Income taxes in AZ are less but it's not cheap.
 
Daniel Nenni said:
View attachment 1078

TSMC is reportedly slowing down its new fab project in Germany, due to growing doubts about whether the pure-play foundry will receive adequate EU subsidies in light of the region's financial constraints, energy crisis, and other concerns. At the same time, the Singapore government is actively trying to persuade TSMC to locate a 12-inch fab there by offering significant incentives and subsidies, according to industry sources.

In response, TSMC said that it is still working with customers and partners to assess the feasibility of building a fab in Europe. The foundry also stated that it does not rule out the possibility of expanding into other regions, but there are currently no plans to do so.

Singapore has already made incentives available to entice foundries such as TSMC to establish local wafer fabs. This time, the government is offering substantial subsidies, such as free land, water, and electricity, as well as tax breaks and sufficient manpower, which may persuade TSMC to construct a new 12-inch fab in Singapore, the sources indicated.

Singapore is where Infineon and other European automotive IC IDMs locate their regional operations. These customers may instead agree with TSMC to establish a fab in Singapore, rather than Europe, to meet their immediate demand, the sources said.

In fact, TSMC is well-versed in Singapore. In 1998, the Taiwan-based foundry formed a joint venture with Royal Philips Electronics (now NXP Semiconductors) and EDB Investments of Singapore to build an 8-inch fab locally in Singapore. The fab began production in 2020. Dubbed SSMC, the fab is now a joint venture between NXP and TSMC after the latter two companies bought out EDB Investments' stake in 2006.

Vanguard International Semiconductor (VIS) is also considering locating a 12-inch fab in Singapore due to the country's highly appealing subsidies, according to the sources. VIS previously acquired an 8-inch fab in Singapore from Globalfoundries.

www.digitimes.com

Singapore offers substantial subsidies to entice TSMC to build 12-inch fab locally

TSMC is reportedly slowing down its new fab project in Germany, due to growing doubts about whether the pure-play foundry will receive adequate EU subsidies in light of the region's financial constraints, energy crisis, and other concerns. At the same time, the Singapore government is actively...
www.digitimes.com
Click to expand...
Yes, and some other companies are also introducing new further other/bigger fabs in Singapore like

(i) UMC who in addition to their existing fab in Singapore launched in February last year the perspective to build ~5 B$ a new fab to have ~ 30k wafers/month of 22/28nm technologies in 2024…
(ii) Soitec to invest ~ 430 M$ to double the production capacity of their Singapore's wafer fab…
(iii) Globalfoundries who invested ~ 4 B$ to expand their fab capacity in Singapore expected for around now Q1 2023…

And also, in term of changes of both business model and geolocalisation, Foxconn (Hon Hai Precision Industry Co Ltd ), after recently wanting to count semiconductors among their core business, initially bought in 2021 their first wafer fab 6-inch in Taiwan from Macronix (who now wanted to focus on 12-inch…) and has then also planned within a JV with DNeX (Dagang NeXchange Berhad) to first build a 12-inch wafer fab with 28~40 nm technologies in Malaysia, then a second one in South-East Asia after (near/in…) Singapore…
 
Nokokara said:
Yes, and some other companies are also introducing new further other/bigger fabs in Singapore like

(i) UMC who in addition to their existing fab in Singapore launched in February last year the perspective to build ~5 B$ a new fab to have ~ 30k wafers/month of 22/28nm technologies in 2024…
(ii) Soitec to invest ~ 430 M$ to double the production capacity of their Singapore's wafer fab…
(iii) Globalfoundries who invested ~ 4 B$ to expand their fab capacity in Singapore expected for around now Q1 2023…

And also, in term of changes of both business model and geolocalisation, Foxconn (Hon Hai Precision Industry Co Ltd ), after recently wanting to count semiconductors among their core business, initially bought in 2021 their first wafer fab 6-inch in Taiwan from Macronix (who now wanted to focus on 12-inch…) and has then also planned within a JV with DNeX (Dagang NeXchange Berhad) to first build a 12-inch wafer fab with 28~40 nm technologies in Malaysia, then a second one in South-East Asia after (near/in…) Singapore…
Click to expand...

It seems it also just a race to eat the fat subsidy offered.

TSMC is far over capacity to chase all, and every subsidy on offer around the world I think.

They have the most motivation to go with it for the leading node + 1 or 2 nodes, but not building legacy node fabs as they already have quite a bit of underutilisation, and they make more than half of the capacity on the market for them.

However, if I were playing a bad boy, I would've signed on ALL of these offers, and used the subsidy to do dumping on the legacy node market, without actually committing to building all of that extra cap.
 
jms_embedded said:
Phoenix area got more expensive recently with the median price of houses increasing nearly 2x in the last 5 years and 3x in the last 10 years (https://www.valleywidehomes.com/phoenix-home-prices-year-over-year/)... nowhere near Silicon Valley standards, but no longer an enticing consolation for those who endure the summer heat here. Silicon Valley and Phoenix area sales taxes are similar (total state/county/city sales tax in the 7-9% in Phoenix, 9 - 10% in Santa Clara County).

Income taxes in AZ are less but it's not cheap.
Click to expand...
And apparently TSMC has a lot of stress/pressure to achieve profitable mass production of their 5 ~ 3 nm wafers in their US new plant with also already some delays in Arizona…

Morris Chang was historically often thinking that there are much highest costs and lowest profits of the wafers productions in US, also with a lack of manufacturing talent and extremely high costs, will always be challenging for negotiations with their customers to keep their gross margin above 53% as chip production in US are around +50% higher than in Taiwan…
 
US robots are just as ambitious as Taiwanese robots, they eat cheaper food, and have far more stable housing. Customers are also realizing that getting access to supply is worth a little extra money, if that is even the case moving forward. Expertise now moves at the speed of the internet. I would think TSMC would try to expand rapidly in AZ and leapfrog the meeting going wokesters.
 
Nokokara said:
Morris Chang was historically often thinking that there are much highest costs and lowest profits of the wafers productions in US, also with a lack of manufacturing talent and extremely high costs, will always be challenging for negotiations with their customers to keep their gross margin above 53% as chip production in US are around +50% higher than in Taiwan…
Click to expand...
Yes costs in US are so much higher, we have so many laws in place to gimp our robots which is why the ones made in china perform better.
 
Labor laws don't apply to robots. Legal paperwork is done for large companies benefits to squeeze out small companies and preserve their monopolies. This won't effect TSMC. They have plenty of money to compete with Intel's lobbyists. Please explain why automatic factories in the US cannot compete.
 
cliff said:
Labor laws don't apply to robots. Legal paperwork is done for large companies benefits to squeeze out small companies and preserve their monopolies. This won't effect TSMC. They have plenty of money to compete with Intel's lobbyists. Please explain why automatic factories in the US cannot compete.
Click to expand...
I think he was being sarcastic cliff. In response to the totally bogus and made up wafer cost in the us are 50% higher claim, he was making a point that 300mm fabs are heavily automated (and thus will have negligible cost difference to the ROC).
 
Daniel Nenni said:
The foundry business sure is getting a lot of attention. Singapore is one of my favorite places but it is really expensive for tourists. Not sure what the cost of living is compared to Arizona. More than Hsinchu I'm sure.
Click to expand...

Prices here in Singapore are skyrocketing.

Housing rental is up 50%+ for all new contracts.

All the investments mentioned are not generating much in the way of e,ployment , but they look good in the papers :)
 
Barnsley said:
Prices here in Singapore are skyrocketing.

Housing rental is up 50%+ for all new contracts.

All the investments mentioned are not generating much in the way of e,ployment , but they look good in the papers :)
Click to expand...

That's weird. I rented a 1br in Bedok for around usd $800 a month in 2008, and rents apparently stayed close to flat for a decade+, and then apparently jumped out of a sudden in a few years.
 
Paul2 said:
That's weird. I rented a 1br in Bedok for around usd $800 a month in 2008, and rents apparently stayed close to flat for a decade+, and then apparently jumped out of a sudden in a few years.
Click to expand...
1br whole unit to self is now $3k+

$800 might get you a room only if you are lucky.

The rental prices the past 2 years have gone crazy.

During COVID and WFH, the multi generational pack em in style of living here forced many locals to go out and rent, along with Malaysians having to stay in Singapore to keep their jobs due to border restrictions , demand shoot up....

Now prices just heading up n up

Going to be very very difficult to bring folk in to work , especially at the mid level that doesnt warrant any kind of package
 
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