Hon Hai acquires stake in Malaysian tech company

06/11/2021 08:43 PM
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Hon Hai
Hon Hai's headquarters in New Taipei. CNA file photo

Taipei, June 11 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. has acquired a roughly 5 percent stake in a Malaysian holding company with semiconductor interests to boost its presence in the IC sector.

Hon Hai, also known as Foxconn globally, said it spent 108 million ringgits (US$26.27 million), or NT$726 million, for a 5.03 percent stake in Dagang NeXchange Bhd, which operates its information technology businesses through its subsidiaries.

According to Hon Hai, Dagang NeXchange currently owns a 60 percent stake in SilTerra Malaysia Sdn Bhd, which runs 8-inch wafer facilities in Malaysia.

Through the investment in Dagang NeXchange, Hon Hai said it will extend its reach in semiconductor and electric vehicle development in the Association of Southeast Asian Nations (ASEAN) market in the future as part of its "3 plus 3" initiative.

The "3 plus 3" initiative embodies Hon Hai's strategy to transition from its contract manufacturing business into hardware and software integration and is focused on three emerging industries -- electric cars, robots and digital health care -- that are being developed through the application of artificial intelligence, semiconductor and communication technologies.

SilTerra, which was founded in 1995, specializes in complementary metal-oxide-semiconductor (CMOS) technologies that are used in a wide range of products such as logic ICs, mixed signal devices and radio frequency components, according to its website.

In addition, SilTerra has also invested in other specialty areas such as silicon photonics, bio-photonics and discrete power, according to the Malaysian IC supplier.

Earlier this year, Hon Hai Chairman Liu Young-way (劉揚偉) said his company has put a priority on developing small ICs priced at less than US$2 made from 6- or 8-inch wafers to avoid the sizable capital investment needed for 12-inch wafer production.

Liu said Hon Hai's semiconductor division is expected to have a high-end IC packaging and testing plant start mass production by the end of this year.

In May, Hon Hai and Yageo Corp. said that they will set up a joint semiconductor company, named XSemi Corp, in Hsinchu for small IC development and sales.

Hon Hai is the world's largest contract electronics maker, while Yageo is the world's third-largest multi-layer ceramic capacitor (MLCC) supplier.

(By Chung Jung-feng and Frances Huang)

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