China’s troubled Tsinghua Unigroup chip conglomerate is about to get an $800 million infusion from Taiwan’s Foxconn in the consumer electronics giant’s bid to expand its electric vehicle activity. Battery-powered cars generally require more semiconductors than those that run on gas, and analysts say Tsinghua Unigroup is attractive to Foxconn — which makes everything from iPhones to Xboxes — for its mobile chipset and memory expertise. In 2021, Foxconn secured a deal with U.S. automotive startup Fisker to jointly manufacture electric cars with automotive chips Foxconn plans to develop with Stellantis.

“Foxconn is stepping into semiconductors because the global semiconductor industry for smartphones, EVs and other products is greatly undersupplied and offers big opportunities for growth and supply-chain control,” Strategy Analytics executive director Neil Mawston told Forbes.

Foxconn is an “assembler best known for making Apple products at its factories in China,” notes Forbes. Foxconn has plans to “open a plant in Malaysia, and it’s considering whether to launch one in Saudi Arabia to make EV parts among other gear.”

The Tsinghua Unigroup investment “would not be a co-development partnership like Foxconn’s other EV deals,” but will likely be more transactional, Forbes reports. The investment requires approval from the Taiwan Economy Ministry’s Investment Commission, which is often cautious when it comes to Chinese firms with government or military connections. Tsinghua Unigroup was founded as a business unit of Beijing’s elite Tsinghua University.

As global chipmakers seek to expand capacity, no country is gearing up faster than China, which is set to build 31 new semiconductor factories through 2024. according to The Wall Street Journal, citing a report from industry group SEMI, which puts Taiwan in second place, with 19 fabs coming online during the same period, when 12 new plants are expected in the U.S.

Most of China’s chipmaking capability centers on older technology — a situation exacerbated by Western sanctions — prompting the nation’s chip manufacturers to “recalibrate their approach to focus more projects on lower-end chip technology. In doing so, China potentially stands to become a powerhouse in that segment of the market,” which includes items such as microcontrollers and power-supply chips, used in autos, smartphones and other electronics.

Meanwhile, as the U.S. Congress tries to push the CHIPS-plus bill and its $52 billion in subsidies to passage, Axios reports “IBM is flying more than 60 executives to D.C. this week to meet with lawmakers to stress the importance of passing the legislation, IBM vice chairman Gary Cohn told reporters.”

Yesterday, “the Senate voted 64 to 32 to advance a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology,” according to The Wall Street Journal.

Intel, one of the companies that has announced new builds base on those government incentives, has struck a deal to manufacture chips for Taiwan’s MediaTek, a smartphone-chip designer, marking the U.S. company’s first major customer as it opens its factories to third-party designs.

Chipmaking, writes Axios, “remains a deeply interdependent global business, with each new generation of ‘fab’ or factory requiring specialized equipment and materials sourced from around the world.”

Related:
Chips Bill Aims to Reduce Reliance on China for Semiconductors, Yahoo Finance, 7/25/22
Semiconductor Bill Leaves U.S. at Disadvantage Against China, National Review, 7/25/22
Chips and the China Challenge, The Wall Street Journal, 7/24/22
How China Became Ground Zero for the Auto Chip Shortage, Reuters, 7/19/22
Senate Advances More Than $50 Billion Bill to Boost U.S. Semiconductor Production, CNBC, 7/20/22
Intel, Others Seek Weaker China Rules in Chips Bill, Politico, 7/18/22
China Seems to Have Figured Out How to Make 7nm Chips Despite U.S. Sanctions, The Register, 7/22/22