Dutch chipmaker NXP opens gallium-nitride 5G chip plant in Arizona

A semiconductor fabrication facility owned by Dutch chipmaker NXP Semiconductors N.V. that will make 5G telecommunications chips in Chandler, Arizona. REUTERS/Courtesy NXP Semiconductors

(Reuters) - Netherlands-based chipmaker NXP Semiconductors NV on Tuesday said it has opened a factory in the U.S. state of Arizona to manufacture chips used in fifth-generation (5G) telecommunications equipment.

The facility in the city of Chandler will make gallium-nitride radio chips for 5G wireless data equipment, at a time when U.S. lawmakers are debating billions of dollars worth of aid to bring more chip manufacturing back to the United States.

Taiwan Semiconductor Manufacturing Co Ltd in May proposed a $12 billion plant in Arizona. Intel Corp has a major production facility about 5 miles (8 km) from NXP’s new factory.

Gallium nitride is an alternative to silicon. The material is a key ingredient in 5G networks because it can handle the high frequencies used in the networks while consuming less power and taking up less space than other chip materials.

Fabricating chips from gallium nitride in high volumes is still a niche endeavor, with most supplies coming from NXP, SkyWorks Solutions Inc and Qorvo Inc.

NXP said the new facility will produce chips from gallium nitride wafers with a diameter of 150mm, or about 6 inches - half the size of wafers used for most conventional silicon computing chips but common in alternative materials.

The Arizona factory will house a research and development facility that NXP said will allow engineers to accelerate the development and patenting of gallium nitride semiconductors.

The firm said it expects the plant to reach full production capacity by the end of the year.

Reporting by Stephen Nellis in San Francisco; Editing by Christopher Cushing