Aug 6, 2021

Semiconductor Shortage: Foxconn Acquires 6-inch Wafer Fab

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Automotive
Foxconn
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Foxconn further expands its plans to acquire global semiconductor chip plants acquiring a 6-inch Wafer Fab for US$90.8mn from Macronix

As organisations in the automotive industry release their Q2 financial results for the year, many have commented that while their sales have been ‘strong’ or ‘better than expected’, unless the semiconductor shortage improves, it is feared that despite strong customer demand, sales and revenue for the second half of the year will be flat.

“Although there are signs that the supply bottlenecks for semiconductors are beginning to ease, we expect a very challenging third quarter from a supply perspective,” Alexander Seitz, CFO at Volkswagen.

“The BMW Group has made individual adjustments to its production programme to take account of the availability of semiconductor components. The company expects the supply situation for semiconductor components to remain difficult and cannot rule out the possibility of this impacting sales during the rest of the year,” said BMW.

Despite the positivity, some organisations such as Hyundai have not had such a successful quarter, reporting that the COVID-19 pandemic and unstable supply of semiconductor chips disruption has resulted in a 2.4% year-on-year decrease in units sold for the company.

General Motors has also been facing the extreme impact of the global shortage, closing three of its North American full-size pickup truck assembly plants just a week after they resumed production following a previous shutdown also related to the shortage.

"The global semiconductor shortage remains complex and very fluid [..] The recent scheduling adjustments have been driven by temporary parts shortages caused by semiconductor supply constraints from international markets experiencing COVID-19-related restrictions."

Could Foxconn’s Growing Number of Acquisitions in the Semiconductor Sector be the Answer?

As the electronics manufacturing conglomerate looks to make its own waves in the electric vehicle (EV) market, Foxconn has been seeking to acquire chip plants globally as the worldwide shortage rattles through not only the automotive industry but through electronics too. 

With the bottleneck causing production cuts and supply chain disruptions for manufacturers, Foxconn’s acquisition of a currently inoperational semiconductor plant could play a part in the solution. 

In a joint news conference, Foxconn and Macronix commented that the sale of the 6-inch wafer fabrication plant (fab) in Hsinchu (Taiwan’s chip-making hub) will be finalised by the end of the year.

“The acquisition of the 6-inch wafer fab in Hsinchu Science Park officially signals Foxconn’s entry into the manufacture and development of wide band gap semiconductors, especially SiC, paving the way for a 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). SiC MOSFET is an important device for EV, while EV occupies the No.1 position in Foxconn’s 3+3 strategy. The 6-inch wafer fab will function as S Business Group’s headquarters in Hsinchu, the world famous semiconductor cluster, enabling closer partnership with the semiconductor companies based in the Hsinchu Science Park”, said Young Liu, Chairman and CEO of Foxconn.

 

“To enhance advanced technology and global competitiveness, Macronix will focus on 12-inch wafer business, especially R&D and manufacturing of the advanced 3D NAND Flash and NOR Flash products after capacity expansion. Macronix is pleased to see the subject 6-inch wafer fab continue to make its contribution to Taiwan as Foxconn commits to have the fab be used as an important base for Foxconn to reinforce its semiconductor development plan and to meet the demand of electric vehicles. Considering that Macronix is advancing to take the lead in the global automotive electronics market, a closer collaboration between Macronix and Foxconn in the near future may be anticipated”, said Miin Wu, Chairman and CEO of Macronix.

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