04:55 AM EDT, 06/05/2024 (MT Newswires) -- NXP Semiconductors ( NXPI ) and Vanguard International Semiconductor have agreed to form a joint venture to build a 300 millimeter semiconductor wafer plant in Singapore with an estimated initial build-out cost of $7.8 billion, the companies said Wednesday.

Under the deal, NXP will contribute $1.6 billion for a 40% stake in the joint venture, named VisionPower Semiconductor Manufacturing Company, while Vanguard International will own the remaining 60% for a $2.4 billion contribution. The companies have also agreed to contribute an additional $1.9 billion, while the remaining capital required will be sourced from third parties, they said.

Construction of the initial phase of the project is expected to begin in H2, subject to regulatory approvals, while initial production is anticipated in 2027.

The facility, which will be operated by Vanguard International, is expected to produce 55,000 300mm wafers per month in 2029.

The companies expect the joint venture to generate 1,500 jobs in Singapore.