Foxconn Technology Group, the world’s biggest electronics contract manufacturer, said that it would acquire a semiconductor manufacturing facility, taking the company deeper into the chip business at a time of unprecedented global strain.
Foxconn, best known as the largest assembler of Apple Inc. iPhones, said Thursday that it would buy the Taiwan-based plant, which manufactures six-inch wafers used in cars, a purchase that it said would help secure a steady supply of auto chips as Foxconn expands further into the electronic vehicle industry.
Foxconn, based in New Taipei, Taiwan, said in February that it would assemble cars for electric-vehicle startup Fisker Inc., and in May said it would join forces with Stellantis NV, the maker of Jeep and Chrysler, to develop in-car software.
Foxconn’s deal with Macronix International—which is based in Hsinchu, Taiwan—is small, worth the equivalent of about $91 million. But it positions Foxconn to jump into production of a certain kind of semiconductor that is quickly emerging as a leading technology in the electric-vehicle industry.
The six-inch wafers manufactured at the plant are used primarily for making car-chip components made of silicon carbide, a material that is regarded as offering better performance than traditional silicon for some tasks, such as fast charging. U.S. electric vehicle maker Tesla Inc. began using silicon carbide components in 2018, making it one of the first in the industry.
Foxconn’s acquisition is expected to be completed by the end of the year, the two companies said Thursday. Young Liu, Foxconn’s chairman, said the plant will be able to churn out enough capacity to supply 30,000 electric vehicles each month. One six-inch wafer can be used to make silicon carbide components for two vehicles.
Mr. Liu was evasive when asked at a Thursday press conference whether Foxconn is making its entry into silicon carbide products to manufacture chips for Tesla. The two companies haven’t announced any supply agreements related to the newly purchased plant, and Thursday’s announcement made no mention of the Palo Alto, Calif.-based auto maker.
“I can’t comment on whether selling stuff to Tesla is the purpose of us [making the deal], but they must have seen the advantage [of such technology],” Mr. Liu said.
Spokespeople for Tesla didn’t immediately respond to a request for comment.
Foxconn, formally known as Hon Hai Precision Industry Co., has been looking to move beyond its core business as the world’s major contract manufacturer of consumer electronics, according to a person familiar with the matter, especially as its largest client, Apple, ramps up its own efforts to diversify its assembly supply chain.
For Foxconn, the auto industry has been a natural growth area. Cars require chips for functions including touch-screen display and brake control. Electric vehicles require even more chips than traditional cars.
In addition to Fisker and Stellantis, the company is in talks with a handful of other U.S. firms to take on electric vehicle production, Mr. Liu has said. He didn’t elaborate. Foxconn is considering producing Fisker vehicles in Wisconsin, where the Taiwanese company has a facility, Mr. Liu said.
Foxconn’s newly purchased fabrication plant is located in Taiwan’s Hsinchu Science Park, a central chipmaking hub that includes the headquarters of Taiwan Semiconductor Manufacturing Co., the world’s largest contract chip maker. Mr. Liu said Foxconn’s purchase would enable it to work more closely with other chip makers.
The inability to secure chip supply has become a major headache this year for a range of industries, chief among them auto makers. A combination of natural and man-made disasters, including the pandemic, fires and a major drought in Taiwan, have served to disrupt global chip production just as demand for products powered by these chips has soared.
Source: Mint