Hon Hai Precision Industry Co (鴻海精密) and Yageo Corp (國巨) yesterday signed an agreement to form a joint venture called XSemi Corp (國瀚半導體) to develop” small ICs” priced under US$2 per unit, marking the latest effort by Hon Hai to bolster its foothold in the semiconductor market.
The collaboration fits into Hon Hai’s plans for expansion by providing a steady supply of small semiconductors, while also serving the global market, the companies said in a joint statement.
The new company, to be located in Hsinchu, would “consolidate the strengths and resources of the two market leaders” to provide a “complete semiconductor supply chain and provide customers with total solutions,” the statement said.
Photo courtesy of Hon Hai Precision Industry Co and Yageo Corp
The time is right to form new strategic alliances in the semiconductor supply chain, said Hon Hai chairman Young Liu (劉揚偉), who was joined by Yageo chairman Pierre Chen (陳泰銘) at the signing ceremony in Taipei.
“The semiconductor industry is facing the biggest upheaval in the past three decades, and the industry order will face a serious restructuring,” he said.
“Now is undoubtedly the best time to initiate strategic partnerships in various segments,” he said.
Liu said the small chips that XSemi plans to produce would be “a critical part of Hon Hai’s developmental roadmap.”
Electric vehicles, digital health and robotics are three major sectors that Hon Hai is targeting to increase vertical integration, he said.
“XSemi will not only help Hon Hai to secure semiconductor sourcing, but will also serve clients around the world and become a profit driver for the group,” he said.
The market for power semiconductors is forecast to reach US$40 billion by 2025, while analogue semiconductors would reach US$25 billion.
About 90 percent of the semiconductor components used in an electric vehicle fall under the “small chip” category.
The collaboration could bring “tremendous growth” to Yageo by allowing it to expand its product offerings from passive components to active components containing semiconductors, Chen said.
“Through this joint venture, we will further provide the services and products that meet customers’ need for supply chain optimization,” Chen said.
The company has already “started discussions with several global semiconductor companies,” and would announce further collaborations “in the near future,” a press release by Yageo said.
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