SAN FRANCISCO — Taiwan's Hon Hai Precision is set to break ground in 2020 on a $9 billion 300mm chip fab in the city of Zhuhai in southern China, according to a report by the Nikkei news service.

Hon Hai, which operates under the trade name Foxconn, has been mulling plans since early this year to build and operate its own semiconductor fab to make chips for the products it builds for other firms on a contract manufacturing basis. In August, the Wall Street Journal reported that Foxconn inked a deal with Zhuhai's government to locate its first chip fab there.

Last week, Nikkei reported that Foxconn plans to build chipsets for ultra high-definition televisions and CMOS image sensors for phones in Zhuhai, with hopes to eventually expand into production of higher value chips for robotics and autonomous vehicles. Nikkei reported that Foxconn will also enter the foundry market, offering to build chips designed by other semiconductor companies.

A majority of the cost of the fab will be subsidized by the city of Zhuhai, according to the Nikkei report.