According to relevant media reports, Taisic Materials, a subsidiary of Foxconn, successfully produced the first 8-inch SiC substrate in Taiwan, China, China. Previously, the company had only the ability to produce 6-inch SiC substrates.
Shengxin Materials, founded in 2020, is one of the few manufacturers in Taiwan, China that can produce 6-inch conductive and semi insulating SiC substrates at the same time. It has technical advantages in the field of high-quality long crystal. Shortly after its establishment,
SiC crystals with a diameter of 4 inches were successfully grown, and then proceeded towards 6 inches.
According to previous reports, Shengxin Materials‘ monthly production capacity of 6-inch SiC substrates was approximately 400 pieces last year. Later, it increased the number of SiC long crystal furnaces to 65, including 5 from the United States, 10 from Japan, and the remaining 50 from cooperation with shareholder Kenmec. The 65 long crystal furnaces can reach a monthly production capacity of 1200-1600 pieces.
Due to the outstanding performance of Shengxin Materials in the SiC field, it has also attracted the attention of Hon Hai. Last July, in order to gain a long-term competitive advantage in the automotive semiconductor industry and further ensure the supply of SiC wafers, Hon Hai Group acquired a 10% equity stake in Shengxin Materials through Hongyuan International Investment at a price of NT $100 per share, with a cumulative price of NT $500 million. Completing the investment in Shengxin Materials is an important step for Hon Hai to deepen its layout in the semiconductor and automotive fields.
01Hon Hai has a dense layout in the SiC field
In recent years, Hon Hai has continued to expand its footprint in the semiconductor and automotive field. In 2021, Hon Hai spent NT $2.52 billion to acquire the plant and equipment of Wang Hong‘s 6-inch wafer factory located in the Hsinchu science park. The factory has the production capacity of 15000 6-inch wafers, which is mainly used by Hon Hai to develop and produce third-generation semiconductors, especially SiC power components for electric vehicles.
In 2021, Hon Hai and YAGEO jointly established an automotive semiconductor design company. We have improved the development system of the "pre process" for manufacturing semiconductor components. At the beginning of this month, both parties decided to spin off the IC and SiC component/module product lines and teams of the joint venture company, which will be undertaken by Hon Hai‘s newly established IC design subsidiary at a cost of NT $204 million, further strengthening Hon Hai‘s footprint in the SiC field.
In addition, in April of this year, Foxconn purchased four testing plants from Zhilu Capital after the sale of four testing plants in mainland China in 2021. Some of these testing plants were used for system level packaging and electromechanical packaging, while others were mainly used for power component packaging such as third-generation SiC semiconductors and insulated gate bipolar transistors (IGBTs) in vehicles. It is reported that Hon Hai plans to provide mass production services for silicon carbide (SiC) in the second half of this year.
02
Hon Hai Actively Transforms
As the global smartphone shipments have been poor in recent years, the OEM‘s business has seen revenue increase without profit increase. According to the latest financial report of Foxconn, its net profit in the first quarter of this year plummeted by 56%, the largest quarterly decline in three years. In the outlook for the second quarter, the company‘s consumer electronics business revenue in the second quarter will decline year-on-year, which mainly includes smart phones, Accounting for more than half of Foxconn‘s total revenue.
Therefore, in the past few years, Foxconn has been actively trying to transform, moving upstream and entering the semiconductor field. Through continuous acquisition and investment, Foxconn has continuously expanded its semiconductor footprint and invited Jiang Shangyi to join. On the other hand, Hon Hai wants to find the next growth point for its OEM, and electric vehicles are its next goal after smartphones.
According to incomplete statistics, from 2020 to October 2022, Foxconn has cooperated with at least dozens of automotive industry chain enterprises. But entering the new energy vehicle market from smartphones is not a simple matter. On the one hand, compared to traditional car companies like Geely, Foxconn has a weak technological foundation, and on the other hand, it does not have enough influence in the face of new forces. Although it has established a certain layout in the automotive industry chain through acquisitions and equity investments, it still faces heavy peer competition pressure, with first mover and last mover advantages almost invisible. Overall, Foxconn‘s "road to car building" is still long.
03summary
Overall, after four to five years of intensive layout, Hon Hai has begun to achieve preliminary results in the fields of new energy vehicles and SiC. This time, Shengxin Materials has conquered the 8-inch SiC long crystal technology, which is also expected to accelerate its layout in the field of new energy vehicles. However, if Hon Hai is to go further in the new energy and semiconductor fields from a global perspective, more efforts are needed.
