Briefing: Foxconn to open RMB 60 billion chipmaking plant in Zhuhai

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砸600亿进军半导体!富士康拟在珠海建12寸晶圆厂! – ICInside

What happened: iPhone assembler Foxconn Technology is preparing to launch a RMB 60 billion (around $9 billion) chipmaking project in China. A majority of the investment is subsidized by the government of the southern Chinese city of Zhuhai. Its plant will churn out chipsets for ultra high-definition 8K televisions and camera image sensors, as well as various sensor chips for industrial uses and connected devices. The aim is to eventually expand the chip facility in Zhuhai to make more advanced chips for robotics and autonomous vehicles.

Why it is important: Cooperation between the government and private companies in China’s semiconductor industry demonstrates the country’s resolve in moving to high-value manufacturing through its “Made in China 2025” industrial policy.  The aim is to build a self-sufficient advanced chip industry to support the country’s technological development. Yet, chip manufacturing is extremely costly and has high barriers to entry. According to sources, the move is expected to position Foxconn as a challenger to TSMC, another Taiwanese chipmaking giant. Additionally, the project is aimed at the company reducing its reliance on Apple as the global smartphone market slows.