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Currently, leading manufacturers are accelerating the transition to 12-inch wafer production.
According to a recent report by the Dutch local media “de Gelderlander”, semiconductor giant NXP plans to close several 8-inch wafer fabs and shift towards more efficient 12-inch manufacturing. This strategic adjustment aims to enhance production efficiency and reduce costs.
NXP is reportedly planning to close four 8-inch wafer fabs, one of which is located in Nijmegen, Netherlands, while the other three are in the United States.
NXP, in collaboration with GlobalFoundries, will establish a joint venture VSMC in Singapore in June 2024, planning to invest $7.8 billion to build a 12-inch (300mm) wafer fab. This fab will focus on producing mixed-signal, power management, and analog products, targeting markets including automotive, industrial, consumer electronics, and mobile devices. Additionally, the technology licensing and transfer for VSMC will come directly from TSMC to ensure its technological strength and advancement.
The first 12-inch wafer fab of VSMC is expected to begin mass production in 2027, with a monthly capacity reaching 55,000 wafers by 2029.
Although the initial investment cost for 12-inch wafers is higher, the significant reduction in unit costs provides an irreversible cost advantage in mature processes. According to analysis, a single 12-inch wafer can produce 2.25 times the output of an 8-inch wafer, not considering edge losses. This transition not only indicates lower fixed and manufacturing costs but also presents significant profit enhancement potential for NXP.
Moreover, the physical advantages of 12-inch wafers, combined with the rapid development of downstream applications such as smartphones, PCs, data centers, and autonomous driving, have led to a growing market preference and rapidly increasing demand for 12-inch wafers. The high production efficiency and advanced linewidth precision of 12-inch wafers also make them more competitive in high-end applications.
Additionally, with technological advancements and process optimizations, the production efficiency and yield of 12-inch wafers are continuously improving, and costs are expected to decline further in the coming years.
As a leading automotive chip manufacturer (with automotive business accounting for 56.4%), NXP’s transformation aligns with the demand for high-integration, low-power automotive chips, especially in smart cockpit and autonomous driving areas that require 12-inch support for advanced processes. According to SEMI data, global 12-inch capacity is expected to grow over 30% from 2023 to 2026, while 8-inch capacity will only grow by 14%; it is anticipated that global monthly capacity for 12-inch wafers will reach 9.2 million by 2025, with a compound annual growth rate of nearly 10%.
It is worth mentioning that the Nijmegen site is NXP’s core hub in the Netherlands, responsible for manufacturing, R&D, testing, and technical support, and its closure will have a structural impact on local business operations.
