Foxconn 'considering $10b plant in the US'

TAIPEI • Foxconn Technology Group is considering building a display manufacturing facility in the United States for upwards of US$7 billion (S$10 billion), a major investment for Apple Inc's main manufacturer that may create tens of thousands of American jobs during President Donald Trump's first year in office.

The Taiwanese firm is considering a joint investment with Sharp Corp, the Japanese display supplier it bought last year, but details have yet to be hammered out, Reuters cited Foxconn chairman Terry Gou as saying in Taipei on the sidelines of a company event. Foxconn confirmed the report yesterday.

An investment by Foxconn, whose main listed unit is Hon Hai Precision Industry, would mark a victory for Mr Trump, who has repeatedly blasted China for stealing American jobs and devastating US manufacturing. But Foxconn is one of the single largest private employers in China, and the government there has conveyed its concern over the possibility that it will shift investment away from the country.

China is pivotal to Foxconn's massive electronics assembly operation, which produces more iPhones and iPads than any other in the world. Foxconn said it is in preliminary talks to broaden its US investment, without elaborating.

Mr Trump has often articulated his vision of bringing manufacturing jobs back to America from China, which became the world's factory floor, thanks to cheap labour and central policy support. And he has singled out Apple in the past.

  • 50k

  • Number of jobs Foxconn's planned facility may create in the United States.

A potential strategic shift by Foxconn unnerves China because the firm employs roughly a million workers across the country. Major factory job cuts have been known to trigger protests in the past.

For now, Foxconn's prospective US plans remain preliminary. The envisioned facility could cost over US$7 billion and may create 30,000 to 50,000 jobs, Mr Gou said. It would also bring manufacturing closer to the largest market for iPhones and iPads, a potential boon for Apple, which yields about half of Hon Hai's revenue. The plant could be a joint investment with Apple, the Nikkei Asian Review said yesterday. Apple did not respond to a request for comment.

The idea took shape after Mr Gou spoke with Mr Masayoshi Son, chairman of SoftBank Group and a close business partner. Mr Son, who has announced his own plan to invest US$50 billion in the US, asked Mr Gou for his views. A document Mr Son held up for reporters after he met Mr Trump last month had the words "Foxconn" and "$7 billion" alongside SoftBank's numbers.

"I thought it was a private conversation, but then the next morning it was exposed," Mr Gou told reporters. "There is such a plan, but it is not a promise. It is a wish." He also said he sees US protectionism as "inevitable" and warned about the subsequent threat to economic development.

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A version of this article appeared in the print edition of The Straits Times on January 24, 2017, with the headline 'Foxconn 'considering $10b plant in the US''. Print Edition | Subscribe