Foxconn gets into the chip-making game

The world’s biggest electronic device manufacturer is forming a new venture designed to cater to the lower end of the chip market.

XSemi will be a joint venture between Foxconn’s parent company, Hon Hai, and electronic component maker Yageo, both of which are Taiwanese . It will focus on the development of semiconductors with average selling prices lower than $2.00, which they refer to as ‘Small IC’ (integrated circuit). It looks like there will be further partnerships with other chip specialists such as TSMC, so this seems to be as much about efficiency as shaking up the sector.

“The semiconductor industry is facing the biggest upheaval in the past three decades, and the industry order will face a serious restructuring,” said Young Liu, Chairman of Hon Hai (above, right). “Now is undoubtedly the best timing to initiate strategic partnerships in various segments.”

“Yageo aims to create a one-stop shop for its customers, and through this joint venture, we will further provide the services and products that meet customers’ need for supply chain optimization,” said Pierre Chen, Chairman of Yageo (above, left).

Foxconn seems to make most of the consumer electronics in the world, with its most famous customer being Apple. There is nothing Apple CEO Tim Cook likes more than a nice, streamlined supply chain, so XSemi will presumably focus on dealing with all the bits and bobs other than the main processors that go into the circuit boards of products like the iPhone.