One fab is not enough! An affiliate of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) plans to build another wafer fab in Singapore, as the AI "chip shortage" drives an Asian layout.

Title context: One fab is not enough! An affiliate of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) plans to build another wafer fab in Singapore, as the AI "chip shortage" drives an Asian layout. Text: VisionPower Semiconductor Manufacturing Co. (VSMC), a joint venture between Vanguard International Semiconductor, a smaller affiliate of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US), and Dutch company NXP Semiconductors NV (NXPI.US), is considering building a second wafer fab in Singapore to meet continuously growing demand. VSMC Chairman Leuh Fang said in an interview that the new VSMC fab may produce chips with more advanced process nodes than its first factory in Singapore. Rising demand for artificial intelligence services and the data centers that support them has led to a global semiconductor supply shortage, even as major manufacturers such as Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR continue to expand capacity. This boom cycle has prompted Taiwanese manufacturers to deploy new capacity overseas, with Singapore becoming one of the popular destinations attracting global investment. "The supply shortage will persist for some time," Leuh said. "We should have built two fabs here at the same time." VSMC on Monday held a groundbreaking ceremony for its first wafer fab in eastern Singapore. Construction began at the end of 2024, and the company expects to invest $7.8 billion. Leuh declined to estimate the cost of a potential second factory. "It is still too early to discuss the budget because we have not yet decided which technology to adopt," he said. "Different technologies will significantly affect the total investment scale." It is worth noting that VSMC's expansion is not an isolated case, as Singapore is experiencing a second wave of investment in the semiconductor industry. United Microelectronics Corp. Sponsored ADR's (UMC.US) new wafer fab, built with a $5 billion investment in Singapore's Pasir Ris wafer fab park, entered commercial mass production in 2026. It plans to increase Singapore's annual capacity to 1.3 million wafers, making it United Microelectronics Corp. Sponsored ADR's largest production base outside Taiwan, with its workforce also set to double from about 1,200 employees.