Hon Hai to invest $40 mn in US manufacturing

Taiwan tech giant Hon Hai group, known in China by its trade name Foxconn, yesterday said it was planning an investment of $40 million in manufacturing and research facilities in the US.

The largest contract maker of electronics in the world, the company is also the largest supplier of Apple's iPhones.

The announcement came as chairman Terry Gou visited the US as part of a delegation of Taiwan business leaders to promote trade and technology cooperation, according to a company statement.

According to Hon Hai, it planned to invest $30 million in two years and hire 500 new workers in its Harrisburg, Pennsylvania, subsidiary to build a "high-value manufacturing base" for high-end electronics and other products.

It was also considering an investment of $10 million in two years in a joint project with the Pittsburgh-based Carnegie Mellon University, a leader in robotics, for automation research and development.

Hon Hai, the largest computer components manufacturer in the world assembles products for Apple -- including the iPhones, as also for Sony and Nokia.

The company has a 1-million strong workforce in China, roughly half of it based at its main facility in the southern city of Shenzhen. It also boasts production facilities in over 10 countries, including Vietnam, Brazil and Mexico.

The company has said in 2011 that it planned to mass produce industrial robots as part of its efforts to cope with labour shortages and increasing wages in China.

It has also been diversifying its business lines and clients with slowing down of revenue from PC and phone manufacturing.

The company had been actively considering expansion into the US as it wanted to improve its profitability by making more high-end technology products, according to the company official.

Gou said earlier this month that the company might invest or build a factory in Arizona after a meeting with Arizona governor Janice K Brewer in Taipei.

Reuters quoted Gou as saying, investing in the US was not for manufacturing for specific brands as speculated in the market.

He added the company wanted to build a high-precision, high-tech and high value-added manufacturing industry.