The WSJ reports that Foxconn and the world’s largest chip assembler, Advanced Semiconductor Engineering (ASE), are fighting for control of the number three company in the chip assembly business, SPIL. ASE assembles chips used in the Apple Watch, while SPIL last year started supplying chips for iPhones.
ASE had planned to take a controlling interest in SPIL in order to protect its market-leading position and remain one jump ahead of competitors. Key iPhone assembly company Foxconn, however, persuaded the company that it would do better by collaborating with the Chinese firm in order to win more of Apple’s business.
SPIL shareholders will vote on the proposed deal with Foxconn tomorrow. Although ASE had already bought some shares in the company, it did so too late to qualify for vote, so has instead sent a letter to other SPIL shareholders urging them to vote against the motion.
All three companies are competing for system-in-package (SiP) orders from Apple, which analysts say will be worth billions of dollars.
There is huge competition for Apple’s business among chip manufacturers and assemblers, with Apple reportedly playing off Samsung and TSMC against each other in order to squeeze out last-minute price cuts for the A9 chip. Samsung’s recent return to profit was attributed to the chips it supplies to Apple.
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