Foxconn said to eye several US states as site of new mega plant

Updated 2017-06-20 09:29:48 China Daily

The U.S. states of Wisconsin, Michigan, and Pennsylvania are reportedly vying hard to become home to a major new Foxconn plant employing 50,000 people to make components for Apple iPhones, as the group itself confirmed to China Daily it was on the hunt for a manufacturing site.

The company's admission followed media reports that Wisconsin was in talks with Foxconn to build a billion display-making plant, months after news that Foxconn CEO Terry Gou met with a representative of Pennsylvania's economic development agency to potentially invest in the state. Michigan is also said to be pursuing a deal.

Representatives from Wisconsin and Michigan's economic development offices declined to comment, saying that they do not discuss any pending or potential opportunities. A representative from Pennsylvania also did not respond.

U.S. President Donald Trump alluded to a potential Foxconn investment in Wisconsin during a visit to Milwaukee, Wisconsin on Tuesday.

"We have a lot of companies moving into the United States. We're negotiating with a lot of companies," he said.

"Just backstage we were negotiating with a major, incredible manufacturer of phones and computers and televisions, and I think they're going to give the (state) governor a very happy surprise."

Foxconn, officially called Hon Hai Precision Industry Co Ltd with headquarters in Taipei, Taiwan province, is the world's biggest contract device maker and is most known for its manufacturing for Apple. Its plants assemble iPhones and other devices for the U.S. tech behemoth.

Foxconn said in a statement to China Daily that the company is "exploring a potential investment that would represent a major expansion" of its current U.S. operations.

"We are engaged in discussions with officials at various levels of government regarding our ongoing plans to significantly increase our investments in the U.S.," the company added.

"Our company is conducting an evaluation of the conditions and potential locations for establishing manufacturing facilities in the U.S.."

Zheng Yujie, director at China Development Institute, a Shenzhen-based think tank, said the potential Foxconn deal does not mean that Chinese mainland is losing its appeal as a manufacturing powerhouse.

"The Pearl River Delta, for instance, houses arguably the world's most advanced and flexible electronic industry chain and suppliers. It can help entrepreneurs in Shenzhen turn their ideas of new hardwares into molds within a day," Zheng said.

"The same process could cost a week or two for businessmen in California. That's an edge that no other countries can rival."

Zheng added that experienced workers in China, who have honed their skills over the past three decades, also remain a major attraction for international companies.

Rumors about a U.S. Foxconn plant began circulating as early as last November, when it was reported that Apple asked suppliers to look into producing the company's smartphones in the U.S..

Foxconn CEO Terry Gou downplayed the request, telling reporters in January that a U.S. plant was "not a promise" but a "wish". He also expressed concern over the skills of the U.S. workforce, and said that he wanted guarantees of inexpensive land and electricity before considering the investment.

Foxconn employs more than 1 million people in China, making electronic devices for brands like Amazon, Google, Dell, Sony, and Nintendo. It produces iPads and Macs for Apple in a manufacturing facility in Shenzhen.

The company reported sales of 7 billion in 2016, a 2.8 percent decrease compared with the year before which has been attributed to Apple's fall in sales.

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