Foxconn, Yageo form semiconductor joint venture XSemi

May 11, 2021 // By Peter Clarke
Foxconn, Yageo form semiconductor joint venture XSemi
Two Taiwan giants, Hon Hai Precision Industries, which trades as Foxconn, and passives manufacturer Yageo, have said they will form a semiconductor joint venture XSemi Corp.

Foxconn, the world's leading assembler of electronic equipment and Yageo, the world's third largest manufacturer of passive components since its acquisition of Kemet, said they want to extend their businesses into the semiconductor industry to help address such markets as electric vehicles, robotics and health electronics.

However, the proportions of the joint venture to be held by each parent were not disclosed. It also remains unclear whether the duo intend for the joint venture to be fabless or to eventually receive the capital investment to allow it to manufacture analog, mixed-signal and power chips.

Foxconn said the joint venture will focus on developing semiconductor chips with average selling prices (ASP) below US$2.00 and that it has started discussions on collaboration with several global chip companies.

It is likely that XSemi is being lined up to provide chips for the automotive, healthcare and robotics sector where 'small chips' can make up 90 percent of the semiconductor bill of materials. This would put XSemi in a similar place to a company such as Nexperia, now owned by Wingtech Technologies Co. Ltd., which happens to be a Chinese contract manufacturer (see China-owned Nexperia refinanced with $1.5 billion).

Foxconn has been signalling its intention to enter the semiconductor sector since 2018 and has made a couple of unsuccessful approaches to established semiconductor operations (see Foxconn bids for stake in Malaysian foundry and Foxconn plans to be a chip company).  

Next: Teaming up

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