As a leader in automotive chips, NXP's transformation is in line with the demand for automotive chips to evolve towards high integration and low power consumption, especially in the fields of smart cockpits and autonomous driving, which require 12-inch support for advanced processes.
Currently, leading manufacturers' wafer manufacturing is accelerating the migration to 12 inches.
According to a recent report by Dutch local media "de Gelderlander", semiconductor giant NXP plans to close several 8-inch wafer fabs and switch to more efficient 12-inch manufacturing. This strategic adjustment is aimed at improving production efficiency and reducing costs.
It is reported that NXP plans to close four 8-inch wafer fabs, one of which is located in Nijmegen, the Netherlands, and the other three are in the United States.
NXP and TSMC established a joint venture company, VSMC, in Singapore in June 2024, with a planned investment of USD 7.8 billion to build a 12-inch (300mm) wafer fab. The fab focuses on the production of mixed-signal, power management and analog products, with target markets including automotive, industrial, consumer electronics and mobile terminals. In addition, VSMC's technology licensing and transfer will come directly from TSMC to ensure its technological strength and advancement.
VSMC's first 12-inch wafer fab is expected to start mass production in 2027, and its monthly production capacity will reach 55,000 wafers in 2029.
Although the initial investment cost of 12-inch wafers is higher, the significant reduction in unit cost gives it an irreversible cost advantage in mature processes. According to analysis, the production volume of a single 12-inch wafer is 2.25 times that of an 8-inch wafer, excluding edge loss. This shift not only heralds lower fixed and manufacturing costs, but also brings NXP great potential for increased profits.
At the same time, due to the physical property advantages of 12-inch wafers and the rapid development of downstream applications such as mobile phones, PCs, data centers, and autonomous driving, 12-inch wafers have gradually gained market favor and demand has increased rapidly. At the same time, the high production efficiency and more advanced line width accuracy of 12-inch wafers make them more competitive in high-end applications.
In addition, with the advancement of technology and process optimization, the production efficiency and yield of 12-inch wafers are constantly improving, and it is expected that the cost of 12-inch wafers will further decrease in the next few years.
As a leader in automotive chips, NXP's transformation is in line with the needs of automotive chips to evolve towards high integration and low power consumption, especially in the fields of smart cockpits and autonomous driving, which require 12-inch support for advanced processes. According to SEMI data, the global 12-inch production capacity will increase by more than 30% from 2023 to 2026, while the 8-inch will only increase by 14%; it is expected that the global 12-inch monthly production capacity will reach 9.2 million pieces in 2025, with an annual compound growth rate of nearly 10%.
It is worth mentioning that the Nijmegen base is NXP's core hub in the Netherlands, undertaking comprehensive functions such as manufacturing, R&D, testing and technical support. Its closure will have a structural impact on the local business layout.
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