Phone and R&D plants, other facilities may help expand presence in mainland
Foxconn Technology Group, the world's largest electronics contractor, hopes to enhance its intelligent manufacturing capacity and expand its presence in the mainland market by investing 37.5 billion yuan ($5.7 billion) in a smartphone plant, R&D center and other facilities in Nanjing, Jiangsu province, experts said.
Foxconn, also known as Hon Hai Precision Industry Co, has signed a strategic cooperation agreement with Nanjing municipal government, a local government document said.
The spate of investment projects range from a smartphone plant, liquid crystal display TV manufacturing and R&D center, semiconductor equipment production and intelligent terminal devices R&D center, as well as a logistics and supply chain base.
"Nanjing has an edge in talent, whole electronics industry chain, and related industry policy support. Moreover, the manufacturing cost for an enterprise is relatively low in Nanjing, compared with other cities in the Yangtze River Delta region," said an official from Nanjing Municipal Economic and Information Technology Commission.
He said a batch of universities in Nanjing provides talented personnel for enterprises, and the talent loyalty is high in the area. Foxconn acknowledged the investment plan but declined to give more details.
Taiwan Semiconductor Manufacturing Co Ltd, a top contract chipmaker, also signed an agreement with the Nanjing municipal government last year. It will invest $3 billion to build an advanced wafer-manufacturing facility.
James Yan, research director at Counterpoint Technology Market Research, said: "Foxconn is undergoing a transformation from a purely original equipment manufacturer or foundry manufacturer to an electronics giant (that) pays attention to brand building."
Foxconn is expanding its product portfolio, including TVs and smartphones, and other high-tech hardware devices, as well as putting more efforts into artificial intelligence, Yan said. Yan added that Nanjing owns the advanced electronics industry chain and talents, attracting a number of tech companies to set up factories.
"Foxconn has stepped up efforts to expand its production network and upgrade its manufacturing capacity toward intelligent manufacturing in the mainland market," said Zhang Yanbin, assistant director of All View Cloud, a Beijing-based consultancy specializing in home appliances.
As a main assembler of Apple's iPhone, Foxconn acquired Japanese electronics giant Sharp Corp to rejuvenate Sharp's television business and increase its production of LCD panels last year, to find a new growth driver at a time when global demand for smartphones is faltering.