Taiwanese electronics manufacturer Foxconn has inked a memorandum of understanding (MoU) with Malaysian technology firm Dagang NeXchange Berhad (DNex) to set up a joint venture to build and operate a facility for 12-inch chips in Malaysia.

If the plan materialises, it will be in line with the Malaysian government’s push to build up its semiconductor industry and mark another big step for the iPhone assembler to enlarge its presence in the semiconductor field, a crucial step in furthering its EV ambitions, as the Nikkei reports.

Foxconn secured a 5.03% stake in DNex in June last year and has one seat on its board, an arrangement that gives it indirect control over chipmaker SilTerra’s eight-inch chip plant in Malaysia. DNex is the parent company of SilTerra Malaysia, having acquired it last year.

The planned facility in Malaysia is expected to produce 40,000 wafers per month, including those utilising both 28-nanometer and 40-nanometer technologies, the most widely used production technologies for micro-controllers, sensors, driver integrated circuits and connectivity-related chips.

The location of the plant as well as the size of the investment has yet to be announced. Based on the planned capacity and technology involved, the report says that chip industry executives estimate that capital expenditure for the project could range from US$3 billion (RM13.2 billion) to US$5 billion (RM22 billion).