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Foxconn rumored to be bringing manufacturing to US

updated 11:50 am EST, Thu November 8, 2012

Plants not expected to build Apple hardware

Foxconn is considering establishing its first manufacturing plants in the US, according to "market watchers" cited by DigiTimes. Locations in cities like Detroit and Los Angeles are currently said to be under evaluation. Foxconn is based in based in Taiwan, and does most of its manufacturing in China, exploiting the cheap labor costs there.

Although Foxconn is Apple's main manufacturing partner, and Apple CEO Tim Cook has expressed interest in bringing manufacturing back to the US, DigiTimes' sources argue that any American plants will probably focus on building LCD TVs instead of Apple products. Building Apple devices is said to be complicated, whereas assembling TVs can be relatively easy and mostly automated.

Foxconn chairman Terry Guo recently stated that the company is working on a training program for US engineers, with the goal of bringing them to China or Taiwan to help in both manufacturing and product design. While overseas, the engineers could learn Chinese and get experience in the manufacturing process. Foxconn is already in talks with the Massachusetts Institute of Technology, Gou commented.



By Electronista Staff
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  1. Zanziboy

    Forum Regular

    Joined: 08-27-08

    Building Apple devices is said to be complicated, whereas assembling TVs can be relatively easy and mostly automated.

    I have to disagree. Building an Apple device is not complicated. There is no technological barrier to moving the production of Apple products to any country in the world. Foxconn is having difficulty making iPhones only because building large volumes of any device without investing in automation makes production difficult. Furthermore, the complexity of the product has little to do with where final assembly takes place.

    The real issues Foxconn is facing is product customization for the US market, and the slim margins on flat screen televisions. Because of the physical size and delicate structure of large flat screen televisions, the international shipping costs of flat screen televisions is high due to import duties, weight, volume, and the associated insurance to cover product loss incurred with palette damage. Eliminating the import of fully assembled products from outside the free trade area not only helps to avoid final product import duties, but also minimizes inventory costs. This approach to final assembly is common in consumer products where margins are low and shipping and inventory costs are large. For example, most appliance manufacturers, such as LG, perform final assembly of dishwashers and refrigerators in the US or Mexico. The latest Vizio televisions are manufactured by Foxconn using displays provided by Sharp, so one can assume Vizio is the primary beneficiary of the production move.

  1. martinX

    Fresh-Faced Recruit

    Joined: 09-30-08

    They will announce a plan to build a plant, then play the states off against each other to try and get the best tax breaks so in the end it will cost the state more than they gain. In 10 years, they'll shut the plant and build somewhere else that gives better tax breaks.

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