Taiwan’s Foxconn has formed a joint venture with Yageo to expand its presence in the semiconductor industry.
The supply bottleneck has led to production cuts and warnings of supply chain disruption from manufacturers across the world this year.
Foxconn, which has tech giants such as Apple, among its top clients, said in a statement the two companies will set up a new firm in Taiwan called XSemi Corporation.
“The semiconductor industry is facing the biggest upheaval in the past three decades, and the industry order will face a serious restructuring,” Foxconn chairman Liu Young-way said. “Now is undoubtedly the best timing to initiate strategic partnerships in various segments.”
Foxconn and Yageo are currently in discussions with several semiconductor companies and will soon announce more collaboration plans in the semiconductor industry.
XSemi will focus on making semiconductor chips, or small IC, with average selling prices lower than $2.00.
Liu said in March the company is closely monitoring materials shortages in the consumer electronics supply chain and that could hit less than 10 percent of client orders, though it described the impact as limited.