Hon Hai Precision Industry Co (鴻海精密) has made further progress in its expansion into semiconductor manufacturing as its subsidiary teams up with Dagang NeXchange Bhd (DNeX) to build a 12-inch wafer fab in Malaysia.
Big Innovation Holdings Ltd (BIH), a wholly owned subsidiary of Hon Hai, has inked a memorandum of understanding (MOU) with DNeX to collaborate on establishing and operating the semiconductor fab in the Southeastern Asian country, it said in a statement released by DNeX on its Web site.
The fab is expected to produce 40,000 12-inch wafers per month, deploying 28-nanometer and 40-nanometer process technologies, the statement said.
Photo: screen grab from the Dagang NeXchange Bhd Web site
Under the MOU, DNeX and BIH are to work together to decide the site for the planned fab, project financing, and initial management structure and key personnel.
“The new fab will be the first 12-inch wafer fab in Malaysia initiated by a Bumiputera company,” Tan DNeX group managing director Sri Syed Zainal Abidin Syed Mohamed Tahir said.
“This technology node will have a long production life and have the widest range of applications,” he added.
Semiconductor manufacturing is one of Hon Hai’s three new business focuses.
The company, a key iPhone assembler, has set its sights on producing power management chips, radio frequency and image sensors using mature technologies rather than cutting-edge technologies, Hon Hai chairman Young Liu (劉揚偉) told investors in March.
Hon Hai in June last year acquired 120 million shares, or a 5.03 percent, stake in DNeX for 108 million ringgit (US$24.6 million at the current exchange rate).
In a filing with the Taiwan Stock Exchange, Hon Hai — known globally as Foxconn Technology Group — said the share purchase was done via its Singapore subsidiary Foxconn Singapore Pte Ltd.
In addition to Malaysia, Hon Hai in February signed a memorandum of understanding with Indian billionaire Anil Agarwal’s Vedanta Ltd to establish a joint venture that aims to manufacture semiconductors in the South Asian nation.
Hon Hai expects semiconductor revenue to grow by 10 to 20 percent this year from NT$70 billion (US$2.35 billion) last year.
By 2023, it is forecast to surpass NT$100 billion, the company said.
Semiconductor stocks on Friday took a beating after a grim profit warning from Idaho-based Micron Technology Inc sparked fresh worries about the US’ earnings power as the country is potentially heading for a recession. Despite a broader stock market rally, the Philadelphia Stock Exchange Semiconductor Index dropped 3.8 percent after Micron, the largest maker of memory semiconductors in the US, flagged that demand was cooling for chips used in computers and smartphones. The index — which is home to US chip giants Advanced Micro Devices Inc and Nvidia Corp, as well as Micron — is down 38 percent this year. Historically, semiconductor
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