Foxconn - Preparing a $7 billion display factory

January 28, 2017

In partnership with Apple, Foxconn is preparing to build a $7 billion display manufacturing plant.

China's electronics manufacturing giant and Apple's main partner, Foxconn, is considering setting up a $7 billion display manufacturing plant in the US.

Reports from The Wall Street Journal and Nikkei Asian Review say Foxconn CEO Terry Gou discussed the construction plans at a company conference last weekend, estimating that the plant in question could produce 30,000-50,000 jobs.

Foxconn has been considering opening such a plant in the US since 2014 and Terry Gou said the company would make its move now, but would need significant incentives and relief from the government in the form of low-cost land and energy supplies.

The new factory may be a joint investment and partnership with Apple. "Apple is willing to invest in this factory because it too has a need for displays," Gou said, according to Nikkei Asian Review. Foxconn is Apple's largest partner and has the largest iPhone manufacturing plant in China with significant tax breaks from the Chinese government.

Any investment in the new factory by Apple would be a political victory for the new US president Donald Trump, who has repeatedly lashed out at Apple for giving jobs to the Chinese. To questions from journalists to Apple about whether the above scenario is true, we have not yet received clear answers from the company.

Gou also said that this kind of "protectionism" on the part of the new president is inevitable, but he does not know whether the US is in a position to absorb the cost of bringing jobs back to its own territory. "In the future they will find themselves paying up to 500$ more for products no longer produced in the US that are no better than their Chinese counterparts of 300$."

Bloomberg reports that the new factory will also deal with Japanese display maker Sharp, which Foxconn bought for $3.5 billion last year.

However, this is not the first time we've heard about these Foxconn plans, as the company's logo (along with the $7 billion figure) appeared in a presentation made to reporters by SoftBank CEO Masayoshi Son last December. In the same presentation it was announced that SoftBank would invest $50 billion in the US over the next four years.

Gou said the U.S. plant would benefit Foxconn by paying off on shipping costs from China, but stressed that the company would need serious financial incentives for such an investment to make sense.

He also added that the state of Pennsylvania - where Trump began his political career with the Republicans in 1988, stating that he would bring jobs back to the unemployment-plagued region - is the leading candidate as the site for the new Foxconn plant.

"Right now Pennsylvania is very active," Gou said. "I have to say that other states will have to hurry up if they want us to be interested, otherwise we will go ahead and sign an agreement with the state of Pennsylvania."

from Elichord