Hon Hai says uses TSMC technology for electric vehicle chips

Taipei, Sept. 10 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. is using Taiwan Semiconductor Manufacturing Co.'s technology to roll out its electronic control units (ECUs), as part of its foray into electric vehicle development.

In an online Next Forum held by the Hon Hai Research Institute and industry group SEMI on Thursday, Chen Wei-ming (陳偉銘), head of Hon Hai's semiconductor S business group, said his company is taking advantage of TSMC's 40-nanometer process for ECU production.

Hon Hai is keen to roll out ECUs, which are vehicular electronic systems that control specific functions, tailored for its customers, said Chen.

Although Taiwan companies command the highest market share globally in the upstream pure wafer foundry as well as in the downstream integrated circuit packaging and testing services in the semiconductor industry, automotive electronics represented a very small portion of their sales in the past.

As an example, Chen said that chips used in automotive electronics made up only 3.3 percent of the total sales of TSMC, the world's largest contract chipmaker.

For Hon Hai, which is also known as Foxconn on the global market, Chen said the company is using TSMC's technologies in its ECU production platform to produce lithium battery management chips and body control modules.

In recent years, Hon Hai, one of Apple Inc.'s most important suppliers, has made EVs a central component of its efforts to expand beyond its contract manufacturing business, which it refers to as the "3 plus 3" initiative.

Specifically, the name refers to three emerging industries -- EVs, robots and digital health care -- that are being developed through the application of artificial intelligence, semiconductor and communication technologies.

Chen said semiconductors used in vehicle production used to make up no more than 1 percent of the total production costs for automakers in the past. But, currently, semiconductors contributes about US$489 for production costs in one vehicle on average.

By 2025, Chen said the value could rise further to US$716, implying tremendous business opportunities for the semiconductor industry.

In early August, Hon Hai spent NT$2.52 billion (US$90.97 million) to buy a six-inch wafer plant from Macronix International Co., as part of its efforts to venture into the automotive semiconductor market.

Chen said the six-inch wafer fab will focus on production of third-generation semiconductors which refer to products including silicon carbide (SiC) and gallium nitride (GaN) for EV use. In addition, the new Hon Hai fab will also be involved in the production of infrared ray sensor components for cars' night vision imaging system use.

As Tesla has used SiC in its Model 3 cars, Hon Hai has set its sights on entering the SiC supply chain, said Chen.

Also at the Next Forum, Liu Young-way (劉揚偉), chairman of Hon Hai, said the acquisition of Macronix's six-inch wafer plant has served as a milestone for his company's efforts to enter the third-generation semiconductor industry.

Liu said Hon Hai's efforts to push for the MIH Open Platform in EV development will boost its capabilities in the third-generation semiconductor industry.

The MIH Open Platform was initiated by Yulon Group subsidiary Hua-Chuang Automobile Information Technical Center Co, with which Hon Hai formed a joint venture called Foxtron Vehicle Technologies Co. to provide solutions to other automakers.

Hon Hai hopes to build the platform into the "Android of the electric car industry" as part of its efforts to enter the global electric vehicle market.