June 5 (Reuters) - NXP Semiconductors ( NXPI ) and

TSMC-backed Vanguard International will form a joint

venture to build a $7.8 billion semiconductor wafer

manufacturing plant in Singapore to cater to the automotive,

industrial, consumer and mobile markets.

Vanguard will invest $2.4 billion for a 60% stake

while NXP will invest $1.6 billion and hold 40% of the joint

venture, the companies said on Wednesday.

The firms will also provide an additional $1.9 billion to

support the long-term capacity of the plant.

Construction of the plant is expected to begin in the

second-half of 2024, with initial production available to

customers in 2027, the firms said in a statement. Construction

will start after the required regulatory approvals.

TSMC has held talks with its customers about whether to move

its fabrication plants off Taiwan amid increased tensions with

China, although such a move would be impossible, a senior

company executive said on Tuesday.

Singapore is a major hub for the manufacture of

semiconductors, sometimes dubbed "legacy" or "mainstream", which

suffered shortages during the COVID-19 pandemic and are still

seeing growing demand.

Both firms have other operations on the island country.

A spokesperson for NXP said the investment was one of the

largest in the company's history and would help to improve

"geographical diversity for our most strategic technology

nodes."

The joint venture, which will be operated by Vanguard, is

expected to create about 1,500 jobs in Singapore, the statement

said.

Earlier this year, United Microelectronics Corp ( UMC )

said it would invest $5 billion in a new microchip

factory in Singapore.

(Reporting by Gursimran Kaur in Bengaluru; Additional reporting

by Toby Sterling in Amsterdam. Editing by Sonia Cheema and

Sriraj Kalluvila)