Foxconn Deepens Investment in China With Plans for New Flat-Panel Factory

2 January 2017

Foxconn Technology Group founder Terry Gou said his company plans to build an $8.8 billion television flat-panel factory in Guangzhou, China, depicting the region as an  “investment treasure land” amid calls to move tech manufacturing to the U.S.

The new factory will make advanced liquid-crystal displays with technology from Sharp Corp., the Japanese electronics brand acquired this year by Foxconn.

In a speech announcing the deal, Mr. Gou praised the manufacturing environment in China, where the Taiwanese company makes Apple Inc.’s iPhones and other products. His comments came amid calls by U.S. President-elect Donald Trump to impose 45% tariffs on goods made in China as a means to encourage more manufacturing in the U.S.

Mr. Gou didn't directly refer to Mr. Trump or his tariff proposals. Previously, Foxconn officials said they were considering increasing their investments in the U.S., but Mr. Gou’s remarks Friday suggest Foxconn remains committed to manufacturing in China, where it has most of its assembly lines.

Mr. Gou made a pointed comparison with India, which has hopes to become a center for iPhone production, saying it isn’t a “manufacturing power country” like China.

Foxconn’s founder has in the past played governments off each other as he sought better investment terms, holding talks with different countries or municipalities but only investing in the end in one.

The $8.8 billion (61 billion yuan) investment to build the flat-panel factory will be made by Sakai Display Products Corp., which is mostly owned by Mr. Gou personally. Sharp owns a minority stake in Sakai. Mr. Gou has sometimes taken on riskier investments for Foxconn under his personal portfolio, saying it was safer for Foxconn shareholders.

The new Guangzhou facility is expected to begin production of 10.5-generation 8K displays, smart TVs and electronic whiteboards in 2019, according to Foxconn, which is formally known as Hon Hai Precision Industry Co. It is projected to reach an annual production value of 92 billion yuan.

In his statement, Mr. Gou gave another nod to Chinese policy makers, mentioning that 8K technology fit in with the nation’s “Made in China 2025 strategy.”