Foxconn will set up a chip manufacturing facility in Malaysia with local technology company DNex,

Taiwanese electronics maker Foxconn has signed a Memorandum of Understanding (MoU) with Malaysian technology company Dagang Nexchange Berhad (DNX) to set up a joint venture to create and operate a facility for 12-inch chips in Malaysia.

If implemented, the plan would be in line with the Malaysian government’s pressure to develop the semiconductor industry and mark another major step for iPhone Assembler to expand its presence in the semiconductor sector, as an important step in advancing its EV ambition. Nikkei Report

Foxconn acquired a 5.03% stake in DNex in June last year and has a seat on its board, an arrangement that gives it indirect control over chipmaker Silterra’s eight-inch chip plant in Malaysia. DNex is SilTerra Malaysia’s parent company, acquired last year.

The planned facility in Malaysia is expected to produce 40,000 wafers per month, including the most widely used manufacturing technology for both 28-nanometer and 40-nanometer technologies, micro-controllers, sensors, driver integrated circuits and connection-related chips.

The location of the plant as well as the size of the investment have not yet been announced. Based on the planned capabilities and technology involved, the report states that chip industry executives estimate that project capital costs could range from US $ 3 billion (RM13.2 billion) to US $ 5 billion (RM22 billion).

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