On June 17, Dutch semiconductor manufacturer Nexperia announced that it would spend US$700 million (approximately RMB 4.5 billion) in the construction of its global wafer fabs and R&D bases.

Nexperia is currently a subsidiary of Wingtech Technology, the world's largest mobile phone ODM company. It mainly produces small logic devices and transistors.

▲Nexperia product portfolio (Source: Nexperia)

01

US$700 million investment to expand production to meet market demand

Nexperia was formerly the standard products business unit of European semiconductor manufacturer NXP. Spun off from NXP in 2016. In 2018, Wingtech Technology announced that it had acquired 75.86% of Nexperia's shares at a price of 25.154 billion yuan with investors such as Gree Electric Appliances and Guolian Group.

It is reported that Nexperia will spend US$700 million in the next 12 to 15 months to build its European wafer fab, Asian assembly center and global R&D base, which is equivalent to 50% of its annual sales.

Nexperia said the investment will increase its factory's manufacturing capabilities and recruit new chip designers and engineers to support research and development in areas such as gallium nitride (GaN) FETs and power management ICs.

Due to the rapid increase in semiconductor market demand in the third and fourth quarters of last year, Nexperia's product sales in 2020 reached US$1.4 billion.

At present, the semiconductor market is still very hot. Achim Kempe, chief operating officer of Nexperia, believes that the high demand for semiconductors may continue for a long time.

Achim Kempe said the US$700 million investment will ensure that Nexperia can meet growing demand.

Toni Versluijs, general manager of Nexperia's MOSFET and GaN FET business, also talked about the company's development strategy. He said: "Nexperia had already formulated a global growth strategy before the (new coronavirus) pandemic began. As the (semiconductor market) recovers, we will continue to invest in products, processes and personnel in factories and R&D facilities. This also reflects our confidence in the prospects of the power semiconductor industry."

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The annual output of a single factory is 70 billion devices, and this will increase in 2022.

It is reported that Nexperia’s current fab in Hamburg, Germany, can produce 35,000 8-inch equivalent wafers per month and 70 billion semiconductor devices per year. With the expansion of production scale, the plant's production capacity may increase by 20% in 2022.

By then, the production capacity of Nexperia's TrenchMOS (deep trench MOS) power device factory in Manchester, UK will also increase by 10%. Currently, the factory can produce 24,000 8-inch equivalent wafers per month, and its new production line is about to ship the first TrenchMOS device.

In terms of research, Nexperia will also build new laboratories and other experimental facilities. The Analog & Logic (Analog and Logic) department located at the Nijmegen headquarters in the Netherlands will also build a new laboratory.

In addition, Nexperia also hopes to recruit more than 200 technical personnel to fill its vacancies.

▲Distribution of Nexperia wafer fabs and assembly centers (Source: Nexperia)

03

Emerging technologies drive semiconductor manufacturers to expand production

Nexperia's investment and expansion of production is also a microcosm of the semiconductor industry. Major manufacturers such as TSMC, UMC, and GlobalFoundries are investing in expanding wafer production capacity. It is worth pointing out that the direct reason for the expansion of production by many semiconductor manufacturers is not the global core shortage boom.

Due to the high cost and time-consuming construction of wafer fabs, the entire industry has shown cyclical development. For semiconductor manufacturers, the long-term trend of the entire market is the key factor in investment. Nowadays, as emerging technologies such as 5G, artificial intelligence, and autonomous driving gradually mature, market demand is likely to continue to grow, largely driving the expansion of the semiconductor industry.

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