Why Taiwan’s Foxconn Is Investing $800 Million In China’s Chip Champion

Why Taiwan’s Foxconn Is Investing $800 Million In China’s Chip Champion

Taiwanese manufacturing giant Foxconn plans to invest about $800 million in Chinese chip conglomerate Tsinghua Unigroup, a move that will further expose the world's largest contract assembler of consumer electronics to the fast-growing electric vehicle market. Tsinghua Unigroup could offer Foxconn access to its mobile chipset or memory expertise, says Neil Mawston, executive director with market research firm Strategy Analytics. Battery-powered vehicles run on semiconductor chips, while memory modules help run other automotive applications. Tsinghua Unigroup reorganized earlier this month after defaulting on billions of dollars worth of bonds and analysts say it still needs help. "Tsinghua is struggling with debt and needs friends with spare cash," Mawston says. On the other side of the table, he says, "Foxconn is searching for new revenue streams beyond its core activity of building iPhones for Apple. "Foxconn is stepping into semiconductors because the global semiconductor industry for smartphones, EVs and other products is greatly undersupplied and offers big opportunities for growth and supply-chain control," Mawston says. Fewer stories like this The Taiwanese company also known as Hon Hai Precision and founded by billionaire Terry Gou has pushed into the production of EVs over the past two years. It made a merger-and-acquisition deal