Chip Shortage, No Problem As Foxconn To Build Factory In Malaysia
Looks like we are going to be flushed with chips as Foxconn commits to a new factory.
Foxconn, a name familiar with iPhone and chip manufacturing, is planning to build and operate a ‘wafer fabrication’ plant in Malaysia.
Foxconn or (Hon Hai Precision Industry Co Ltd) is teaming with Malaysian company Dagang NeXchange Bhd or DNeX for this venture. DNeX has stated that they have signed a memorandum of understanding (MoU) with Foxconn’s wholly-owned subsidiary, Big Innovation Holdings Ltd (BIH), to set up a joint venture company for this business purpose.
The proposal is to build and operate a 12-inch wafer fabrication plant here, capable of producing up to 40,000 wafers per month in 28-nanometer and 40-nanometer technology.
This factory will put Malaysia in the global chip ‘map’. DNeX is also a minority investor in SilTerra which is a company that operates an 8-inch wafer foundry that targets 110 to 180nm nodes.
If you are a stock market player, take note, BIH is a wholly-owned subsidiary of Foxconn, and is the investment entity for Foxconn’s semiconductor related activities. Foxconn Singapore, a subsidiary of Foxconn, is a substantial shareholder of DNeX with a 5.03 percent stake.
DNeX, listed on the main market of Bursa Malaysia, has a presence in IT, e-services and energy sectors.
Since this is just a MoU right now, the signed agreement is valid for 12 months (one year) from the inking of the document which was yesterday, May 17th 2022.
It was surprise for us to find out that DNeX group managing director is non other than Tan Sri Dato Sri Haji Syed Zainal Abidin Syed Mohamed Tahir who was the CEO of Proton Holdings from year 2006 to 2012 and then with Petronas Dagangan until the middle of 2020.
We were with Tan Sri when he launched the Proton Preve (a complete made in Malaysia family car) in 2012 and also the Proton Inspira (which was a rebadged Mitsubishi Lancer).
Meanwhile, Foxconn is not new to Malaysia as they already have a factory and office in Kulai Johor. With this new partnership Foxconn will soon be able to compete with the worlds’ leading chip manufacturers who are struggling to keep up with increasing demand. Current global capacity is about 21 million a month and the top four Taiwanese manufacturers are producing 250,000 units a month.
With Foxconn’s future Malaysian factory production of 40,000 a month, they will be able to ensure regional car manufacturers and also electronic manufacturers a steady supply of much needed chips.
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