Foxconn is considering paying $3 billion to acquire chip assembler UTAC

According to two persons with knowledge of the situation, Foxconn of Taiwan is one of the possible bidders for UTAC Holdings, a semiconductor assembly and testing company based in Singapore, in a deal that might fetch the company over $3 billion.

According to the sources, the owner of UTAC, Beijing-based private equity firm Wise Road Capital, engaged Jefferies to spearhead the selling process and anticipates receiving non-binding proposals later this month.

Global chip manufacturing was affected by concerns about national security and technological competition in recent years, particularly between the United States and China.

Historically, semiconductors rely on a very global manufacturing supply chain, but the U.S. took steps to restrict China’s access to advanced chips and high-end manufacturing tools, citing the risk that these would benefit the Chinese military, something Beijing denies.

According to sources, UTAC’s location in China is likely to draw interest from non-US financial and strategic bidders.