Taiwanese iPhone manufacturer Foxconn has reportedly bought a stake in China’s top chip maker, amid escalating geopolitical tensions between both nations.
The deal, which will require approval from Taiwan’s investment commission, forms part of an effort to increase its chip shareholdings in recent months after demand soared during the pandemic.
It comes as state-backed Tsinghua Unigroup undergoes a $9bn bailout, state-owned newspaper Securities Times first reported, before it removed the article.
Onlookers expect the investment to raise national security concerns, similar to activity in the UK’s own semiconductor industry.
Chinese fighter jets on Friday crossed the median line of the sensitive Taiwan Strait, in what the island’s government has described a provocation.
Beijing has claimed that democratically-ruled Taiwan is its own territory and has ramped up military and political pressure to try and force the island to accept Chinese authority.
While the recent surge in demand has led to a faltering supply, Foxconn – also known as Hon Hai Precision Industry Co. – has been actively working to develop its semiconductor offering since 2019, when it appointed the boss of its chipmaking arm, Young Liu, as chairman.
The electronics giant has also been in talks with Saudi Arabia for a $9bn site since March, according to a Wall Street Journal report.
Although its influence is strongest in China, where it is one of the largest employers in the country, making tech for mainland businesses such as Lenovo, Huawei and Alibaba.