In terms of semiconductor packaging business, ASE provides the majority of Apple's System in Packages (SiP). The Taiwanese semiconductor package company Advanced Semiconductor Engineering (ASE) has received major orders from Apple for the Apple Watch, the iPhone 6S and even the 2016 iPhone 7. Yet a portion of Apple's SiP business goes to Hon-Hai or Foxconn through their ShunSin subsidiary. Evidently Foxconn is looking to hopefully expand that business as they've just reached an agreement with Siliconware Precision Industries (SPIL) to form a strategic partnership through share swaps.

It's being reported that the deal was aimed at fending off a tender offer bid from rival Advanced Semiconductor Engineering (ASE), analysts said. ASE announced recently that it planned to buy up a 25% stake in SPIL.

SPIL and Foxconn also said they will cooperate to develop advanced packaging technologies including SiP and integrated fan-out (InFO) wafer-level packaging (WLP) technology, as well as advanced packaging materials such as embedded substrates.

To meet increasing demand from the smartphone, IoT and wearable devices sectors, the partnership will seek to integrate wire-bounding and wafer-level packaging processes from SPIL and SMT, flexible PCBs and module assembly technologies from Foxconn, according to a SPIL statement.

Barron's Asia asks the question this morning: Will Foxconn Tie-Up Help Steal ASE's Apple Business?

The report notes that Citi Research analyst Roland Shu wrote that "A strategic tie-up with Hon Hai could help SPIL land some Apple business. "Leveraging Hon Hai's sophisticated EMS capability, capacity and vertically integrated supply chain, e.g., substrate, HDI and FPCB from ZDT, and partnership with Apple, SPIL has the potential to close the gap with ASE and become a formidable competitor in the SiP business segment."

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