Ennoconn Corporation, a Taiwanese computer hardware subsidiary of iPhone supplier Foxconn, is set to receive a NT$1.1 billion (US$39.8 million) investment from Google, as the two plan to cooperate on more metaverse projects in Taiwan.

Taipei-listed Ennoconn announced Tuesday that Google is set to invest in the company through a private placement. Upon the completion of the deal, the American tech giant will take a 4.6% stake in Ennoconn, making it the third-largest institutional shareholder of the Foxconn subsidiary.

Google Cloud has already worked with Ennoconn — known for its design and development of industrial motherboards — on industrial metaverse projects, according to local media ETToday. Ennoconn’s products, including servers and gadgets for 5G application and the Internet of Things, make the company a strong player in the metaverse space.

The investment comes as Foxconn continues to brand itself as an innovator in the emerging fields of electric vehicles and the metaverse. In November, Foxconn organized an online virtual event where its founder Terry Gou appeared as an avatar to demonstrate the company’s e-vehicle and metaverse ambitions.

In 2017, Google bought a large slice of HTC’s hardware business in a US$1.1 billion deal, giving the U.S. tech conglomerate a vast engineering base in Taiwan.

HTC, a Taiwanese consumer electronics firm that started out making smartphones but later focused on virtual reality (VR) gears, has set the stage for Taiwan to develop its metaverse industry.

“Hats off to HTC who had foresight and tenacity to double down on their VR initiatives several years back,” Jun Wakabayashi, an analyst of AppWorks, a Taiwanese venture capital firm that has supported dozens of blockchain startups, told Forkast.News. “Hardware will certainly be a critical component in creating an immersive experience, but it’s just one component of the metaverse.”

Wakabayashi said Google’s investment in Ennoconn is a “huge sign of validation.”

“In many ways, ‘metaverse’ is a natural extension of Taiwan’s core capabilities which increasingly lie at the intersection of both hardware and software,” Wakabayashi said, adding that given Taiwan’s high rates of internet and mobile penetration and digitally savvy consumer base, it’ll only be a matter of time before usage goes mainstream.

“The country’s massive technical talent pool also gives it a distinct advantage over many of its neighboring countries, as [Web 3.0] is currently a developer’s world,” he said.

Ann Chien, a principal of Infinity Ventures Crypto, a Taiwan-based token only venture fund, told Forkast.News that Taiwan manufactures most of the high-end integrated circuit chips and those chips are key components for building sensors to be included in VR headsets and base stations. “So in a way, Taiwan shall play an important role in the metaverse hardware supply chain.”