Chinese manufacturing giant Foxconn is considering investing $7 billion to build a new factory in the US assembling flat panel screens. Reports from The Wall Street Journal and the Nikkei Asian Review say Foxconn chairman Terry Gou discussed the plans at a company event this weekend, speculating that the factory could create 30,000 to 50,000 new jobs. Foxconn has been considering building such a facility in the US since 2014, and Gou said if the company were to make the move now, it would need substantial incentives from the government in the form of access to cheap land and power.
The new factory might be a joint investment with Apple. "Apple is willing to invest in the facility together because they need the [panels] as well," said Gou according to the Nikkei Asian Review. Foxconn is Apple’s biggest manufacturing partner and runs the largest iPhone factory in the world with substantial tax breaks from the Chinese government. Any investment by Apple in the project would be a political victory for President Donald Trump, who has repeatedly railed against the iPhone-maker for outsourcing jobs to China. We’ve reached out to Apple to confirm Gou’s comments and will update this story if and when we hear back.
Gou said that the rise of this sort of protectionism is “inevitable,” but questioned whether US consumers would be happy to absorb the cost of moving jobs back home. "In the future they may be paying some $500 more for [U.S.] products, but those do not necessarily work better than a $300 phone,” said Gou.
Bloomberg reports that the new facility would also involve Japanese display manufacturer Sharp, which Foxconn bought last year for $3.5 billion. This isn’t the first we’ve heard of these plans, as Foxconn’s logo (as well as the $7 billion figure) both appeared in a presentation to journalists 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 that a US factory making displays would be beneficial to Foxconn by cutting down on shipping costs, but stressed the company would need financial incentives for the deal to make economic sense. He added that the state of Pennsylvania — which Trump became the first Republican candidate to win since 1988, in part due to his pledge to bring jobs back to the area — was currently ahead in the bid to win Foxconn’s investment. “Right now Pennsylvania is very proactive,” said Gou. “I have to tell other states to hurry up or we’ll go ahead and sign with Pennsylvania.”