Foxconn Reportedly In Discussions To Buy Stake In Malaysian Tech Company DNeX

Taiwanese manufacturing giant Foxconn is reportedly engaging in talks to buy a stake in Malaysian technology company Dagang NeXchange Bhd (DNeX), sources told Bloomberg.

Interestingly enough, the Taiwanese firm lost a bidding war to DNeX a few months ago over the acquisition of chipmaker SilTerra Malaysia Sdn Bhd. According to a Bloomberg source, Foxconn could buy a minority stake in DNeX and help grow SilTerra’s business.

Sources informed the US news outlet that the situation is fluid – the discussions are ongoing and could still possibly lead nowhere. When asked separately by Bloomberg, DNeX said it cannot comment on any specific discussion while Foxconn declined to comment.

In February, DNeX and its Chinese investor partner won their bid to acquire SilTerra from Malaysian sovereign wealth fund Khazanah Nasional for RM273 million. Speaking to reporters later, Foxconn Chairman Young Liu indicated that the firm was still interested in obtaining a partnership with SilTerra.

With the world facing a crippling chip shortage, Foxconn has been expanding its footprint in the semiconductor business. Earlier this month, it entered a joint venture with fellow Taiwanese firm Yageo to form a company dedicated to making chips.

Relatedly, Foxconn itself sees the global chip shortage possibly lasting well into the second quarter of 2022.

Foxconn Enters Into Chipmaking Joint Venture With Yageo

Taiwanese contract manufacturing giant Foxconn has entered into a joint venture with fellow Taiwanese company Yageo, forming a new firm called XSemi that will be churning out semiconductor chips.

Chip supplies have been strained due to the COVID-19 pandemic as well as growing US-China tensions. According to Reuters, Foxconn chairman Liu Young-way said that the semiconductor industry was facing its biggest upheaval in three decades, making strategic partnerships particularly timely now.

Foxconn announced that XSemi would focus on producing semiconductor chips or “small IC” with average selling prices lower than US$2 (~RM8.24). The former claimed that both it and Yageo were holding talks with several global semiconductor firms and would announce more collaborative plans in the industry soon.

Relatedly, the US government is pushing Taiwanese chipmakers to meet the demands of US automakers, which have seen worker layoffs and production delays because of the chip shortage.

“We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to, you know, prioritize the needs of our auto companies since there’s so many American jobs on the line,” said US Commerce Secretary Gina Raimondo at a Tuesday event, Reuters reported.

Raimondo said that the US government was continuously working on that issue, but also noted that the medium- and long-term solution would be to simply make more chips in America.

Foxconn Discussing Electric Car Partnership With Vietnam’s VinFast

Taiwanese manufacturer Foxconn is engaged in early discussions with Vietnamese automaker VinFast over a potential electric vehicle (EV) partnership, sources told Reuters.  Speaking anonymously, they revealed that Foxconn is keen to buy VinFast’s EV production lines.

VinFast, which is Vietnam’s first fully-fledged domestic carmaker, is a fairly young automaker as it only founded in 2017. That being said, the company has a solid background since it is a subsidiary of Vingroup JSC which is a massive conglomerate founded by the country’s first billionaire, Phạm Nhật Vượng.

But one source said that VinFast is instead leaning towards a partnership – the company wants to brand itself as an eco-friendly automaker and keep its EV business. While Foxconn apparently declined to comment on this matter, a VinFast’s spokesperson has told Reuters that it has indeed received proposals from the Taiwanese manufacturer but nothing has been set on the stone at the moment and the discussion towards batteries as well as electric car parts.

Known by many for its work on iPhone, Foxconn has recently been making aggressive forays into the automotive market. In January, it linked arms with Chinese automaker Geely to provide contract manufacturing and electric vehicle consulting services for other carmakers.

Then, last month, it reached a deal codenamed “PROJECT PEAR” to build electric vehicles for US electric car company Fisker.

Foxconn Chairman Liu Young-way said in October last year that the company wants to provide components or services to 10% of the world’s electric vehicles by 2025 to 2027, Reuters noted.

Apple itself is eager to enter the electric vehicle market, reportedly planning a 2024 launch for its car project. To that end, Apple allegedly entered talks with carmakers like Hyundai and Nissan, but those discussions have fizzled out for now.

Foxconn Shifting Some iPhone 12 Production Away From China To India

China’s already eroding reputation as the ‘world’s factory’ has taken another hit. Taiwan manufacturer Foxconn is set to shift some of its iPhone 12 production away from China to India, Nikkei Asia reported.

Up to 10% of Foxconn’s iPhone 12 production will be moved to a factory in Tamil Nadu, a southern state in India, the report added. This would mean that the phone would no longer be exclusively produced in China, which faces increasingly stiff competition from India and Vietnam.

Foxconn has long based most of its operations in China, but increasing labour costs and deepening US-China tensions has prodded it to look elsewhere. Understanding this, India has deftly exploited the situation by tempting major smartphone manufacturers with attractive subsidies.

All iPhones are manufactured by three Taiwanese firms: Foxconn, Pegatron, and Wistron. Foxconn already makes older iPhone models in India, while Pegatron and Wistron have plans to expand there, Nikkei Asia said.

But India isn’t the only beneficiary of this larger shift. Foxconn will begin producing iPads in Vietnam this year – something it previously did only in China. Furthermore, Pegatron set up shop in Vietnam last year in March.

It isn’t like Beijing is unaware of the problem. A top Chinese leader recently opined on the weaknesses and vulnerabilities of the country’s manufacturing sector.