M&A helps Apple Assembler Foxconn go even further into EVs.
Foxconn, a Taiwanese company that makes consumer electronics, has bought and merged two companies that make parts for electric cars. This will help the Taiwanese company compete in a very competitive market.
When Foxconn made the announcement last week, they said that they had bought the wireless business of Arqana Technologies in Taiwan and merged with AchernarTek, an integrated circuit design company in California. Foxconn didn't say how much they paid for the business. There are two things that will help Foxconn, which was founded by a wealthy Taiwanese man named Terry Gou, and its customers make semiconductors for cars and 5G networks, Foxconn said.
The Taiwan and Belgium units of AchernarTek and Arqana will merge, and the new company will be called iCana. With Foxconn's help, iCana can share its expertise and new ideas, which will help iCana meet the growing demand for 5G-connected electric cars.
Starting with electric car parts, iCana CEO Glenn Vandevoorde said that the newly formed unit will "create new products and penetrate new markets for semiconductors in a wide range of industries."
For the global electric vehicle market, Fortune Business Insights predicts that by 2028, it will be worth $1.3 trillion. This is a compound annual growth rate of 24%. A Taipei-based market research group says the market for automotive semiconductors will grow from $35 billion in 2020 to $68 billion in 2026.
There has been a lot of demand for automotive chips since the first wave of the pandemic ended in late 2020. This is because there is a lot of "pent-up consumer demand" for electric cars and hybrids.
The market research firm Counterpoint Research says that Foxconn, which is a "latecomer" to electric cars, is using mergers, acquisitions, and cooperation with other companies to get ahead. Brady Wang is an associate director in Taipei. This way of doing things "is good and could be better," Wang says.
One of Taiwan's best-known manufacturers has been moving toward electric cars over the last year. They make iPhones and iPads for Apple at their factories in China. In 2021, Foxconn signed deals with Fisker, a company based in Los Angeles, and Stellantis, a company that makes cars all over the world. They agreed to make electric cars in the U.S. and work together on automotive chips.
Foxconn is working with Zhejiang Geely Holding Group, a Chinese car company, to make electric cars in China, the world's largest EV market. FOCUSCONN has invested in electric scooter company Gogoro over the last year to help it move into electric cars more.
Foxconn has the advantage of being able to change, Wang says. It changed quickly in 2020 to make ventilators for hospitals when the first wave of Covid-19 came out, for example.
In comparison to other electronic component manufacturers, Foxconn has advantages because it is a conglomerate that can make a lot of things and has a lot of money and people, says Tu Chia-wei, an analyst with the Market Intelligence & Consulting Institute in Taipei.