Taiwan’s Hon Hai Precision Industry has acquired Macronix International Company, a leading local designer and manufacturer of non-volatile memory (NVM) chips, to help strengthen its automotive semiconductor business.
Hon Hai, also known as Apple’s leading contract manufacturer Foxconn, said the NTD2.52bn (US$91m) deal includes the Macronix six-inch wafer fab in the Hsinchu Science Park, 40 miles south-west of Taipei.
Hon Hai chairman Young Liu said the plant would be used as an R&D centre, to develop and manufacture silicon carbide (SiC) chips for use in electric vehicles (EVs).
He said Hon Hai intends to spend “several billion dollars beyond the purchase price to expand the fab’s capacity to 15,000 wafers per month, enough for three electric vehicle models”.
Liu added the “acquisition of the wafer fab in Hsinchu officially signals Foxconn’s entry into the development and manufacture of wide band gap semiconductors, especially SiC, paving the way for our long-term commitment to semiconductor development. The manufacturing of SiC is in line with Foxconn’s 3+3 strategy (EV, digital health, Robotics + AI, semiconductor, advanced communication)”.
He said the “SiC MOSFET is an important device for EVs, which occupy the top position in Foxconn’s 3+3 strategy. The wafer fab will function as our headquarters in the world-famous semiconductor cluster of Hsinchu, helping us to forge closer partnership with other semiconductor companies based [there]”.
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Liu said Hsinchu plant upgrades should be completed by 2024 and chips developed there would also be produced at other Hon Hai locations.
Macronix chairman and CEO Miin Wu said in a statement: “To enhance advanced technology and global competitiveness, Macronix will focus also on the 12-inch wafer business after the capacity expansion, especially in the development and manufacture of advanced 3D NAND Flash and NOR Flash products. Macronix is pleased to see that its 6-inch wafer fab will continue to make its contribution to Taiwan, as Foxconn is committed to use the fab as an important base to strengthen its semiconductor development plan to meet growing demand from electric vehicles”.
The acquisition of the 6-inch wafer fab at the Hsinchu Science Park signals Hon Hai’s entry into the business of “wide-bandgap semiconductors”, particularly SiC chips, and its long-term commitment to the semiconductor industry, Liu said.
The fab would be suitable for making SiC chips, as most manufacturers are migrating production from four-inch to six-inch fabs, but the six-inch fab could no longer manufacture memory chips competitively, he said.
The deal paves the way for Hon Hai to deepen its partnership with Macronix as they explore additional opportunities in the electric vehicle business, Liu said.
Macronix is the biggest supplier of NOR flash memory chips used in vehicles.
Reports have said that Hon Hai beat out a handful of rivals to buy the fab as Tesla joined local chipmakers United Microelectronics and Vanguard International Semiconductor to buy a less-advanced fab amid a persistent chip crunch.
Macronix chairman Miin Wu said he was relieved after feeling pressured to strike a deal.
Some offers came in higher than Hon Hai’s, he added.
Hon Hai declined to comment on whether the company was targeting Tesla when deciding to produce SiC chips, and selecting between SiC and gallium nitride (GaN) to develop new semiconductors.
With a wider band gap, SiC is superior to GaN in terms of power efficiency and reliability which is better suited to electric vehicle chips, Liu said, adding consumer electronics tend to use GaN chips.
The acquired fab would serve as the headquarters for Hon Hai’s business group which would benefit from closer collaboration with the semiconductor companies at the science park, Liu said.
Hon Hai employs 5,000 to 6,000 workers in semiconductor-related jobs, he said.
The transaction is expected to be finalised at the end of this year, the joint statement said.