Taiwan-headquartered Hon Hai Technology (better known as Foxconn) and Yageo Group set up a joint venture to develop small Integrated Circuits (ICs) priced below US$2 to take advantage of an expected restructuring of the semiconductor industry.

In a statement, Foxconn chairman Young Liu said he believes the chip sector is facing the biggest upheaval in the past three decades, noting: “Now is undoubtedly the best timing to initiate strategic partnerships in various segments.”

The contract electronics manufacturer said the JV with partner Yageo will “deepen their footprint” in the semiconductor sector and dovetail with Foxconn’s long-term plan to expand into three emerging industries: electric vehicles (EVs), digital health and robotics.

The venture, named XSemi, will be based in Hsinchu, Taiwan and develop a complete semiconductor supply chain, Foxconn stated.

The two companies held discussions with several global chip makers, noting they will soon announce collaboration plans.

In September 2020, Foxconn formed a strategic alliance with Yageo to combine R&D capabilities. Yageo has experience producing components for EVs as well as digital health, the industrial sector and 5G technologies.