The main manufacturer of Apple products and other global technologies (and a representation of United States outsourcing) is allegedly weighing the pros and cons of building an advanced display manufacturing facility in the United States.
Hon Hai Precision Industry, trading as Foxconn Technology Group, is a Taiwanese multinational electronics contract manufacturing company. Foxconn is the fourth-largest information technology company by revenue and their major clients include American and European electronics. Foxconn produces forty to fifty percent of its revenue from assembling gadgets and other works for Apple.
Now, the company is considering building an “advanced 10th generation panel manufacturing plant” in the United States. This advanced plant could produce liquid display (LCD) screens larger than sixty inches.
The reason behind the consideration is that it is going to get harder and harder to ship large television screens from Asia to the United States. Rising wages in Asia have also forced Foxconn to bring some manufacturing within the United States.
Back in November 2013, Foxconn announced that they might invest over $30 million in the state of Pennsylvania to build a high-tech facility for telecommunication and Internet servers.
The chairman of Foxconn, Terry Gou, said that “automation, software, and technology innovation will be [the] key focus in the U.S. in the coming few years.”
But for now, Foxconn is in talks with several states like Arizona and Colorado to build their facility.
We have all seen the “made in China” stickers on some of our Apple products but for Foxconn, the appeal of China is becoming more of a burden than anything else. Labor unrest and rising costs have made the Taiwanese company consider diversifying away from China and moving towards America.
This move comes at an opportune time when America has renewed its focus on manufacturing, and a push into the United States may also help brighten Foxconn’s public image–which have been blemished by reports of terrible working conditions and riots at their factories in Asia.
Terry Gou told reports that “America is a must-go market.” And one of their fund mangers says that Foxconn has no choice but to find a manufacturing plant in America, stating that “China is no longer a hub for companies worldwide, especially for the PC industry.”
As the major providers of iPhones and iPads, Foxconn is looking to move closer to some of their biggest clients.
But this is not the first time that Foxconn has worked closely with the United States. In years past, the electronics manufacturing company has worked with Apple in the California-based company’s Texas plant to build Macs. If a deal is met, this would be Foxconn’s first go at setting up a plant on U.S. soil.
There’s a lesson to be had here about reshoring in 2014. At this point, it’s not even just American companies looking to bring manufacturing back to the U.S.; multinational and international corporations are also taking a shot at manufacturing in America, where shrinking energy costs and proximity to innovation provide manufacturing appeal.
Sure, they may be an international company, but a Foxconn factory here in the U.S. would be yet another step towards a stronger, larger manufacturing industry right here on our own shores.
Photo credit: Getty Images via Daily Finance