Foxconn Forms JV To Build Chip Fab In Malaysia

Taiwanese contract manufacturer to the stars Foxconn is to build a chip fabrication plant in Malaysia.

The planned factory will emit 12-inch wafers, with process nodes ranging from 28 to 40nm, and will have a capacity of 40,000 wafers a month. By way of comparison, semiconductor-centric analyst house IC Insights rates global wafer capacity at 21 million a month, and Taiwanese TSMC’s four “gigafabs” can each crank out 250,000 wafers a month.

In terms of production volume and technology, this Malaysian facility will not therefore catapult Foxconn into the ranks of leading chipmakers.

But it will put Malaysia on the map, in a way, and that’s important to a Malaysian outfit called Dagang NeXchange (DNeX) that has formed a joint venture with Foxconn to build and operate the fab. DNeX is a minority investor in SilTerra that operates an eight-inch-wafer foundry, targeting 110 to 180nm nodes, in Malaysia’s north. DNeX asserts its Foxconn deal makes it the first Malaysian company to drive development of a 12-inch fab on home soil.

DNeX believes its JV with Foxconn will mean Malaysia can surf global demand for semiconductors to the kind of economic growth and industrial sophistication the nation’s government desires.

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Just when that growth will come about, and the plant’s location, have not been decided. Foxconn and DNeX have signed a memorandum of agreement to build the facility, but neither has mentioned how much they intend to invest.

Fabs take years to build and the world’s current silicon shortage is showing signs of slowing down. But that hasn’t stopped the likes of Intel, Samsung, and TSMC making colossal investments in manufacturing facilities in the expectation that demand will eventually rise, and made-in-China chips will likely be less attractive and/or accessible to buyers. Most of those construction projects are taking place in nations that already host significant semiconductor manufacturing capacity.

Foxconn appears to be chasing opportunities elsewhere, having already targeted India for a new factory in another joint venture. ®