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Apple Supplier Foxconn Charges into EVs

Oct. 16, 2020
Strategic cooperation agreements with FCA, Yageo Group, and Yulon Group position the contract assembler to become competitive in EV development.

While Apple remains mum about its automotive efforts, the main assembler of Apple products—Foxconn Electronics (Hon Hai Precision Industry)—makes no secret that electric vehicles are in its future. Earlier this year, Foxconn and automaker Fiat Chrysler (FCA) announced that the two companies will combine forces to make EVs for the Chinese market starting in 2022. FCA will handle the manufacturing and the Taiwanese company will manage the electronics, providing parts and handling supply-chain management.

In Taiwan, Foxconn and local carmaker Yulon Group formed a joint venture to manufacture vehicles. Yulon, founded in the 1950s, has manufactured Nissan and Mitsubishi cars as well as its own brand Luxgen.

To further advance its plans to play a role in the EV market, Foxconn and passive components vendor Yageo announced last week that they, too, have teamed up. In a press release, Foxconn and Yageo explained that their alliance isn’t a traditional corporate partnership. The two will pool their respective research and development resources (Yageo Group has 15 design and R&D centers around the world) to create an array of new products in cooperation with global end customers.

The two firms will also work to integrate Yageo’s portfolio with Foxconn’s manufacturing capacity, sharing Yageo’s experience in EV components as well as in artificial intelligence, robots, and 5G devices. This strategic cooperation will officially start in the third quarter of this year.

3+3 Strategy

Foxconn said the strategic alliance furthers its long-term “3+3” business development strategy, which refers to the three emerging industries of electric vehicles, digital health, and robotics, as well as the three technology fields of artificial intelligence, semiconductors, and new-generation communication technologies.

Young Liu, Chairman of Hon Hai Technology Group and Pierre Chen, Chairman of Yageo Group attended the signing ceremony of the strategic alliance in person. Said Chen, "With the cooperation of Hon Hai and Yageo, it is not just ‘3+3’ but a ‘3x3’ achievement created by these two groups.” He adds, “Through the cooperation with Hon Hai Group, we are able to enlarge mutual technological benefits and resource sharing to maximize the value of both groups and see multiple growths in the future."

Yageo Group will also provide the group’s expertise and one-stop shopping platform in special semiconductor packaging and testing from Tong Hsing, automotive inductors and magnetic materials from Chilisin, and aluminum electrolytic capacitors from Kaimei.

Jerry Kuo, CEO of Chilisin; Vincent Weng, Chairman of Kaimei; and Heinz Ru, President of Tong Hsing also signed the same strategic alliance agreement with FoxConn. Chilisin provides comprehensive passive components for applications in power, RF, and EMI. Chilisin's portfolio includes automotive inductors, magnetic materials, and aluminum electrolytic capacitors.

The Kaimei Electronic Corp. has multiple divisions producing aluminum electrolytic capacitors, AC/DC fans, and lighting ballasts. Headquartered in Taiwan, the company comes to market globally under the Jamicon brand name.

Tong Hsing Electronics specializes in development and manufacture of custom semiconductor micro-module assembly, and thick- and thin-film substrates. The company produces microelectronic packaging and substrate technology for various industries, including wireless communications, MEMS, image sensors, optical electronics, LED, solar cells, and automotive electronics.

Since all of these firms are based in Taiwan, they will not be affected by the U.S.-China trade conflict. Sharing a regional base will also protect the new Foxconn-Yageo R&D pipeline if another wave of coronavirus infections hits the world.

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