Foxconn lost the bidding for SilTerra Malaysia in February. Now it is talking to the company that won.
The Taiwanese electronics manufacturer, the main assembler of Apple’s iPhones, is in talks to buy a stake in Malaysian technology firm Dagang NeXchange (DNeX), according to sources cited by Bloomberg News. One source said Foxconn could take a minority holding and help grow SilTerra, the chipmaker DNeX bought.
Nothing is settled. The sources said the talks could collapse and no deal is certain. A DNeX representative said the company is always open to discussions with strategic partners and investors but could not comment on any particular one. A Foxconn representative declined to comment.
Markets react
DNeX shares jumped as much as 13.6 per cent in Kuala Lumpur after the report, their highest intraday level in more than a month. The company was valued at about US$474 million.
How the deal came about
In February, DNeX and a Chinese investor bought SilTerra from Malaysian sovereign wealth fund Khazanah Nasional Bhd. for RM273 million (S$87 million), beating Foxconn’s offer. DNeX will own 60 per cent. The Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center takes the remaining 40 per cent.
Foxconn did not walk away. Young Liu, chairman of Hon Hai Precision Industry, Foxconn’s main listed arm, later told reporters the company still wanted a partnership with SilTerra.
A path for investors to come in already exists. In a statement on May 20, DNeX said shareholders had approved a private placement of up to 30 per cent of its shares. The proceeds will pay for the SilTerra purchase and other investments.
Foxconn’s other bets
A stake in DNeX would fit Foxconn’s push into electric vehicles. The company showed its first EV chassis and a software platform in October. Since then it has signed agreements with China’s Zhejiang Geely Holding Group and Byton, Fisker in the US, and Stellantis in Europe.
DNeX itself dates to 1970. According to its website, it runs businesses in information technology and undersea telecommunications cables, along with an oil and gas unit.
