Taiwan's Foxconn plans to build chip facility in Malaysia amid EV push
IPhone assembler joins with local partner to expand semiconductor ambitionsTAIPEI -- Key iPhone assembler Foxconn plans to build a chip production facility in Malaysia with a local partner to capture booming demand for semiconductors used in electric vehicles.
Taiwan's Foxconn signed a memorandum of understanding with Malaysia's Dagang NeXchange Berhad (DNex) through a subsidiary to set up a joint venture that will build and operate a facility for 12-inch chips in the Southeast Asian country, the two companies said on Tuesday.
If the plan materializes, will be in line with the Malaysian government's national push to build up its semiconductor industry and mark another big step for Foxconn to enlarge its presence in the semiconductor field -- a crucial move in furthering its EV ambitions. Foxconn owns about a 5% stake in DNex and has one seat on its board. This arrangement gives the iPhone assembler indirect control over chipmaker Silterra's 8-inch chip plant in Malaysia. DNex is the parent company of Silterra.
The Malaysia memorandum comes after Foxconn in February announced plans to build a chip facility in India with local natural resources conglomerate Vedanta. Foxconn also bought a chip plant in the northern Taiwanese city of Hsinchu -- the heart of Taiwan's chipmaking cluster -- in 2021 to develop silicon carbide chips for automotive uses.
The planned Malaysian plant is expected to produce 40,000 wafers per month, including both 28-nanometer and 40-nanometer technologies. These are the most widely used chip production technologies for microcontrollers, sensors, driver integrated circuits and connectivity-related chips, including Wifi and Bluetooth. Major chipmakers like Taiwan Semiconductor Manufacturing Co., United Microelectronic Corp, and China's Semiconductor Manufacturing International Co. are all expanding capacity for 28-nanometer chips.
The exact location of the plant and size of the investment have yet to be announced. Based on the planned capacity and technology involved, however, chip industry executives estimate that capital expenditure for the project could be between $3 billion and $5 billion.
Southeast Asia has been a popular destination for chip makers to add capacity. Globalfoundries, the world's No. 3 contract chipmaker, is spending $4 billion to expand its production footprint in Singapore. United Microelectronic Corp., the world's fourth largest contract chipmaker, recently announced it will spend $5 billion to build an additional plant in the city-state. Meanwhile Infineon, the biggest European chipmaker, is investing 2 billion euros to expand its manufacturing facilities in Kulim, Malaysia, for power semiconductors, a key component in EVs.
Apart from large economies like the U.S., Europe and Japan, others like India, Thailand and Malaysia are also hoping to develop their own semiconductor industries due to concerns over the resilience of associated supply chains
