FOXCONN Technology Group is in talks to buy a stake in Malaysian technology firm Dagang NeXchange Bhd, according to people familiar with the matter, after losing to it in bidding for a semiconductor company.
The main assembler of Apple Inc’s iPhones could take a minority stake in DNeX and help to expand the business of its chipmaker SilTerra Malaysia Sdn, one of the people said, asking not to be identified as the matter is private. DNeX landed the winning offer in the sale of SilTerra in February, outbidding Foxconn.
Talks are ongoing and could fall apart, and there is no certainty that a deal will materialise, the people said. A representative for DNeX said the company is always open to discussion with strategic partners and investors, but that it cannot comment on any specific discussion. A Foxconn representative declined to comment.
A stake sale would come as the Taiwanese electronics manufacturer, whose primary listed arm is Hon Hai Precision Industry Co, has been growing its footprint in electric vehicles, issuing a steady stream of announcements beginning with the unveiling of its first-ever EV chassis and a software platform in October. Since then the company has struck agreements with Chinese firms Zhejiang Geely Holding Group Co and Byton Ltd, the US’s Fisker Inc and European giant Stellantis NV.
DNeX and a Chinese investor won their bid in February to purchase SilTerra from Malaysian sovereign wealth fund Khazanah Nasional Bhd for 273 million ringgit ($66 million). Hon Hai Chairman Young Liu later told reporters that the company still wanted to secure a partnership with SilTerra.
DNeX has received shareholder approval for a private placement of as much as 30% of its shares, and will use the proceeds to pay for the SilTerra deal as well as other investment, according to a statement on May 20. The Malaysian tech company will acquire 60% of SilTerra, while its partner in the deal, Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center, will buy the remaining 40%.
Established in 1970, DNeX’s businesses include information technology and undersea cables for telecommunications as well as an oil and gas unit, according to its official website.