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Hon Hai, Stellantis to launch joint auto use semiconductor development

2021-12-08
Focus Taiwan
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Hon Hai, Stellantis to launch joint auto use semiconductor development
Hon Hai, Stellantis to launch joint auto use semiconductor development

Taipei, Dec. 7 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. announced on Tuesday that it will team up with multinational car manufacturer Stellantis NV to develop semiconductors for auto production.

In a statement, iPhone assembler Hon Hai, also known as Foxconn, which entered the electric vehicle market to diversify its product portfolio, said it has signed a memorandum of understanding (MOU) with Stellantis to set up an auto semiconductor development partnership.

Under the MOU, the two partners will roll out four auto chips for Stellantis and third parties, the aim being to adopt the new chips in 2024.

Stellantis CEO Carlos Tavares said the upcoming four chips to be produced in cooperation with Hon Hai are expected to meet more than 80 percent of the automaker's demands, according to the statement.

The partnership is expected to stabilize the global chip supply chain at a time when automakers face a major chip supply shortage, Tavares said.

Also in the statement, Hon Hai Chairman Liu Young-way (劉揚偉) agreed, saying that cooperation with Stellantis came about from forecasts of a potential increase in demand for auto chips.

Efforts in semiconductor and software development have become major focuses for Hon Hai as it enters the EV market, Liu added.

Hon Hai has intensified its efforts in recent years to carry out the "3 plus 3" initiative, which is designed to diversify product mix and boost profit margins, with EV development the core of those efforts.

The "3 plus 3" initiative refers to three emerging industries -- EVs, robotics and digital health care -- that are being developed through the application of artificial intelligence, semiconductor and communications technologies.

Hon Hai has its own 8-inch wafer fab, and has acquired a 6-inch wafer fab from Macronix International Co. in August. The plant is scheduled to start production in the first half of 2022.

Hon Hai's semiconductor division currently expects to generate about NT$70 billion (US$2.52 billion) in sales a year, rising to above NT$100 billion in 2023.

It is the second cooperation project between Hon Hai and Stellantis after the two sides announced in May they were investing up to US$80 million in a joint venture -- Mobile Driver -- which will focus on development of smart cockpit solutions for vehicles and gaining a foothold in the Internet of Vehicles (IoV) market by offering entertainment, communications and cloud technology-based applications.

Hon Hai said subsidiary FIH Mobile Ltd., which is listed on the Hong Kong stock exchange, will partner with Stellantis in the 50-50 joint venture.

For its part, Stellantis, formed this year on the basis of a merger between Fiat Chrysler Automobiles of Italy and the French PSA Group, is No. 4 worldwide in terms of auto sales volume and No. 3 in sales value.

Stellantis owns prestigious auto brands such as Peugeot, Citroen, Fiat, Chrysler, Jeep, Alfa Romeo and Maserati.

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