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Foxconn, Yageo to form semiconductor JV

Foxconn (Hon Hai) Technology Group and Yageo have announced plans to form a joint venture for the development and sale of semiconductors.

The venture, XSemi, will be based in Hsinchu, Taiwan and consolidate the strengths and resources of the two market leaders, in addition to the upcoming multifaceted collaborations with leading semiconductor companies in product design, process and capacity planning, and sales channel, they said.

They said XSemi will create a complete semiconductor supply chain and provide customers with total solution services.

Yageo and Foxconn said they have developed a partnership through innovation and integration of services and resources, and XSemi will deepen their footprint in semiconductor, focusing on the development of semiconductor chips with average selling prices (ASP) lower than US$2.00, which they call “small IC.” They added they have started discussions with several global semiconductor companies, and will in the near future announce the collaboration plans in the semiconductor industry.

Foxconn chairman Young-Way Liu said, as cited in a press statement, that “the semiconductor industry is facing the biggest upheaval in the past three decades, and the industry order will face a serious restructuring. Now is undoubtedly the best timing to initiate strategic partnerships in various segments.”

Foxconn has started its semiconductor strategy according to its mid-to-long term blueprints, making it one of the three core technologies for the conglomerate. Within its reach in the semiconductor supply chain, Foxconn has built capabilities within semiconductor equipment, design services, IC design in 5G, AI, CIS (CMOS image sensors), and display driver, foundry fabs, and advanced packaging. This comprehensive portfolio will ride along Foxconn’s long-term plan in the three major emerging industries in EV, digital health, and robotics, to enhance and vertically consolidate the industry supply chain, said Liu.

XSemi’s key product focus – small ICs – will become the most important element of Foxconn’s future plan, they said. It will not only create a steady semiconductor supply to the company’s current communication applications and future emerging technologies, but also fulfill the needs of its international customers, and ultimately enhance the company’s overall profitability.

Yageo’s strengths lie in efficient component production and process management, and it is known for comprehensive global sales channels, they said. This new collaboration could be seen as a natural extension and progression of the strategic alliance initiative with Foxconn last year. This will not only fortify Foxconn’s need for the key core components for EV and digital health, but also showcase Yageo’s forte in consolidation of resources.

After the acquisition of Kemet and Pulse, Yageo has put an emphasis on high-end product development to consolidate technologies and channels to be close to its customers.

Yageo chairman Pierre Chen said that “Yageo aims to create a one-stop shop for its customers, and through this joint venture, we will further provide the services and products that meet customers’ need for supply chain optimization.” With the creation of XSemi, Yageo will further expand its footprints in passive components into semiconductors. DigiTimes

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