Foxconn in talks with US states over factory plans

PUBLISHED : Wednesday, 29 January, 2014, 5:02am
UPDATED : Wednesday, 29 January, 2014, 5:02am


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Foxconn Technology Group, the maker of Apple's iPhones and iPads, is in talks with several US states to build advanced facilities as part of plans to set up factories closer to its clients.

Arizona governor Jan Brewer met Foxconn's founder and chairman Terry Gou in November, while officials from Colorado, Texas, New York, New Jersey and Louisiana had all made contact with the company, said Simon Hsing, a spokesman for Taipei-based Foxconn.

Foxconn, the world's largest contract manufacturer of electronics, may expand in its largest market as clients Apple seek to have their products made in the United States.

"The move is in line with President Barack Obama's policy, which is moving production jobs to the US from overseas," said Xiang Ligang, an independent industry commentator. "Apple is Foxconn's largest client. Foxconn needs to co-operate with its customers in order to maintain them."

Xiang said Foxconn would not be able to move much of its manufacturing to the US.

"In order to produce an iPhone, Foxconn needs a piece of land, a plant and thousands of workers," he said. "There are no big differences in the first two items between China and the US, but only in China will you be able to get a large number of trained workers who would like to do extra hours when there are urgent orders."

Xiang estimated per capita cost for Foxconn in China was about 4,000 yuan (HK$5,086), or US$700, a month. "That will have to be increased to US$2,000 in the US, I think," he said.

Ricky Lai, a research analyst at Guotai Junan International, said the manufacturing cost between the two countries was narrowing.

"In China, labour cost keeps increasing and the yuan keeps appreciating," he said. "Moving manufacturing to the US will also save on transport costs."

Lai said the US would welcome Foxconn's plan because it would create jobs. "They may offer favourable policies to lure Foxconn to make the move."

Gou told reporters in Taipei that any US investment would not be for labour-intensive manufacturing jobs such as assembling smartphones and tablet computers. Instead, company facilities would focus on knowledge- and content-based skills.