Taiwan's Hon Hai Precision to set up Foxconn facility in US
27 January 2014
The world's largest contract manufacturer, Taiwan's Hon Hai Precision Industry, the biggest manufacturer of Apple products and a symbol of US outsourcing, plans to build an advanced display manufacturing facility in the US, its largest market.
At the company's 40th anniversary celebration yesterday, chairman Terry Guo said he was looking to relocate capital-intensive and high-tech manufacturing to the US, according to The Wall Street Journal.
The WSJ quoted Gou as saying that automation, software and technology innovation would be the company's key focus in the US over the next few years.
Assembly of gadgets for Apple or other work for the iPhone maker, brings in an estimated 40-50 per cent of the company's revenue.
The company, better known by its trade name, Foxconn is assessing the feasibility of building an advanced 10th-generation panel manufacturing plant in the US, according to Gou.
A facility of the type could produce liquid display screens larger than 60 inches. He added, it was currently difficult to ship large TV screens to the US from Asia.
According to commentators, as revenue from the company's low-margin contract showed, Hon Hai had been diversifying into other areas including software development and telecom services.
Hit by increasing costs and labour unrest in China, chairman Terry Gou told employees yesterday that Foxconn was considering diversifying away from its manufacturing heartland.
According to commentators, Foxconn had little choice if it was to protect margins and stay ahead of peers who had adopted it's business model.
"The US is a must-go market," said Gou, speaking at the group's annual party on Sunday to mark the end of the Chinese year.
Many customers and partners had asked Foxconn to open shop in the US, Gou said, as they eyed advanced manufacturing much closer to their home base.
However, Indonesia would be a top priority this year as a potential production base with attractive costs and skills and it would go well with Foxconn's deal to design and market phones in the country, with BlackBerry Ltd, as the Canadian company sought the decline of its smartphone business.