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1Hon Hai Precision Industry Co., Ltd.HNHAF, popularly known as Foxconn, andTaiwan Semiconductor Manufacturing CompanyTSM 2.27%are joining hands for a purpose unrelated to their core businesses.

What Happened: Foxconn and TSM are close to signing a deal to procure COVID-19 vaccine shots from German biotech BioNTech SE BNTX 4.55%, Reuters reported. BioNTech along with U.S. pharma giant Pfizer, Inc. PFE 0.97%are authorized by several global drug regulators to market an mRNA vaccine for emergency use.

The Taiwanese companies are reportedly acting on behalf of the government, which has faced severe handicaps in clinching a contract. The Taiwanese government has blamed the stalemate on the interference from China, the report said.

Incidentally, China claims Taiwan, a self-ruled country, as its territory.

Foxconn is Apple Inc.'s AAPL 1.31%contract manufacturer, assembling iPhones and TSMC, a Taiwanese foundry, is a major chip supplier for the tech giant.

"TSMC confirms that the Company has a plan to purchase and donate BNT vaccines to TW government," the company said in emailed statement to Benzinga. "Right now, we are in the middle of the contract signing process and there are multiple parties involved. We will make announcements once it is completed."

TSMC and Foxconn are looking to procure 5 million doses each, the report said.

Why It's Important: Taiwan, being a key outsourcing hub for major global tech players, is a strategically important island. About one-tenth of the island nation's 23.5 million have received at least one dose of COVID-19 vaccine, Reuters said.

The country has contracted to receive vaccine doses fromAstraZeneca, Inc.AZN 0.62%andModerna, Inc.MRNA 0.01%.

China apparently is seeking Taiwan to abide by the commercial rules in place and want the country to source vaccines through Fosun Pharmaceutical Group Co Ltd. The Chinese pharma company has adealwith BioNTech to supply COVID-19 vaccines to the Greater China region that includes mainland China, Hong Kong, Macau and Taiwan.