Taiwan's Hon Hai Precision Industry will formally enter the semiconductor development and design space by cooperating with UK's ARM Holdings, a professional manufacturer in this area, to jointly establish a semiconductor chip development and design center.

Hon Hai believes that there is demand for semiconductors in the Internet of Things sector and the company plans to make it a new growth point.

ARM was just acquired by SoftBank Group in September 2016 and Hon Hai has been maintaining a close relationship with SoftBank. The Taiwanese company is also the manufacturer for SoftBank's humanoid robot Pepper.

Hon Hai and ARM have reached an agreement to set up a semiconductor development and design center in Shenzhen. Apart from using semiconductors on smartphones assembled by Hon Hai, the company may also sell semiconductor products to other companies.

Hon Hai previously achieved a rapid growth by making iPhones for Apple via the company's Foxconn subsdiary. However, with Apple's growth slowdown, Hon Hai is seeking new business development areas. The company acquired Sharp's LCD panel business and it has implemented mergers and acquisitions in upstream fields like automobile parts.

Financial terms related to ARM and Hon Hai were not released.