Foxconn Plans To Build Chip Factory for EVs in Malaysia

Taiwanese manufacturing giant and key iPhone assembler, Foxconn, will be building a new chip production facility right here in Malaysia and they're going to focus a lot on producing semiconductors for electric vehicles or EVs. Foxconn has already signed a memorandum of understanding (MOU) last month with its Malaysian partner, Dagang NeXchange.

This joint venture will see the production of 12-inch chips which is a key component in EV production. They're also planning on producing around 40,000 wafers per month once the facility is up and running, including 28-nanometer and 40-nanometer chips which are also vital for a huge number of electrical components such as vehicle sensors, WiFi, Bluetooth, connectivity, and more.

*Image Credit: Foxconn

Foxconn to produce semiconductors in Malaysia

So, why is Foxconn interested in Malaysia? Well, there are a number of reasons. With Foxconn now owning a small stake in Dagang NeXchange (around 5%), the Taiwanese giant also has a slight control in the Silterra 8-inch chip plant here in Malaysia, which also happens to be a company under the Dagang NeXchange umbrella.

Other reasons include the lower production costs plus dismissing all that headache between the US-China competition and conflicts. If the chips are produced here in Malaysia, they can basically sell them anywhere they want, including China and the US, without any political constraints and other issues that we've been seeing on the news in the past four years or so.

*Image Credit: CNBC

The biggest reason? Malaysia accounts for around 13% of the world's semiconductor, assembly, testing, and packaging. In other words, it won't take them long to set up the factory as well as hire and train local technicians with little to no issues. Not a bad move at all considering that they can hit the ground running to capture a piece of that EV chip pie (or wafer if you want to be ironically accurate about it).