HSINCHU: Taiwanese electronics giant Foxconn said today it will buy a semiconductor plant from a local memory chip supplier for US$90 million, marking a major step by the iPhone assembler to secure a source of chips for its nascent electric vehicle business.
Foxconn has made electric vehicles a major focus of its growth strategy as it looks to offset a slowdown in its mainstay consumer electronics segment.
Securing supplies of chips is crucial to that goal given the global semiconductor supply shortage, company chairman Young Liu has said, and the fact that EVs use far more chips than conventional cars.
The plant belongs to Macronix International, a global leader in specialty memory chips that supplies Nintendo, Sony and Apple.
Located in the Taiwanese city of Hsinchu, it is a so-called 6-inch fab, meaning it makes chips on wafers measuring 6 inches in diameter.
The plant is considered less advanced than 8-inch or 12-inch chipmaking facilities but could still be suitable for churning out sensors and other electrical components used in automobiles.
The 2.52 billion New Taiwan dollar purchase price includes the facility and equipment, but no transfer of employees is involved.
The deal is expected to be completed by the end of the year.
“It’s strategically important for Foxconn to acquire the plant given that the market is still hungry for mature-chip capacity like what Macronix provides,” a source familiar with Foxconn’s plans told Nikkei Asia.
“It will also help Foxconn to strengthen its roadmap for semiconductors in the longer term.”
The purchase of the Taiwanese chip plant comes after Foxconn in June bought a 5% stake in Dagang NeXchange Berhad (DNex) — the parent company of Malaysian chipmaker Silterra — in a deal that secured Foxconn a seat on the board of DNex.
DNex announced yesterday it had signed a US$400 million deal to supply to China-based chip designer Chip One for driver ICs, touch controllers, and fingerprint chips, which are widely used in smartphones, tablets and electrified vehicles.
While Foxconn is well known as a major iPhone assembler and supplier to HP, Dell and Amazon, it has struggled to expand its presence in the chipmaking industry.
To strengthen its capabilities in that area, Foxconn has recruited around 50 employees from TSMC and United Microelectronics over the past few years, Nikkei Asia learned.
It also attempted to acquire a chip production plant from Japan’s Fujitsu that was eventually bought by UMC in 2019.