VisionPower Semiconductor Manufacturing Co. (VSMC), a joint venture between TSMC's smaller affiliate Vanguard International Semiconductor and Netherlands-based NXP Semiconductors, is considering building a second wafer fab in Singapore to meet sustained demand.

VSMC chairman Leuh Fang said in an interview that the potential new plant could produce chips with more advanced process nodes than the company's first Singapore fab. Rising demand for artificial intelligence services and the data centers supporting them has caused a global semiconductor supply shortage, even as major manufacturers such as Taiwan Semiconductor Manufacturing (TSM.US) continue to expand capacity.

This boom cycle has pushed Taiwanese firms to build new capacity overseas, with Singapore emerging as one of the most attractive destinations for global investment. "The supply shortage will persist for some time," Leuh said. "We should have built two fabs here at the same time."

VSMC held a opening ceremony on Monday for its first wafer fab in eastern Singapore. Construction began in late 2024, and the company expects to invest US$7.8 billion. Leuh declined to estimate the cost of a potential second plant. "It is still too early to talk about the budget because we have not yet decided which technology to adopt," he said. "Different technologies will significantly affect the total investment scale."

Notably, VSMC's expansion is not an isolated case, as Singapore is experiencing a second wave of semiconductor investment. United Microelectronics (UMC.US) has invested US$5 billion in a new wafer fab at its Pasir Ris wafer fab park in Singapore, which entered commercial mass production in 2026. The plan is to raise Singapore's annual capacity to 1.3 million wafers, making it UMC's largest production base outside Taiwan, with its workforce also set to double from about 1,200 employees.