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Hon Hai Rethinking Investment Plans For Wisconsin Factory

Hon Hai Precision Industry Co. said that an investment project in the U.S. state of Wisconsin will be adjusted to focus mainly on research and development, instead of manufacturing as initially planned.

Hon Hai, known as Foxconn in the global market, had planned to build a state-of-the-art flat panel production complex in Wisconsin at a cost of USD 10 billion, which is expected to create 3,000 jobs in the initial phase and a total of 13,000 jobs over the next six years.

In a statement released Wednesday, the world’s largest contract electronics maker said it remains committed to the Wisconn Valley Science and Technology Park project, the creation of 13,000 jobs, and to its long-term investment in Wisconsin.

However, the global market environment that existed when the project was first announced in 2017 has changed. “This has necessitated the adjustment of plans for all projects, including Wisconsin,” the statement said.

It also said Hon Hai was broadening the base of its investment in Wisconsin, adding that in addition to its initial plans to produce traditional products such as television sets, it is also seeking ways for Wisconsin’s knowledge workers to promote research and development in advanced industrial Internet technologies and produce high-tech applications and solutions for industries such as education, medical and healthcare, entertainment and sports, security, and smart cities.

The statement followed a Reuters report that Louis Woo a special assistant to Hon Hai Chairman Terry Gou (郭台銘), had said the costs of manufacturing screens for televisions and other consumer products were too high in the United States.

The company initially planned to manufacture advanced large screen displays for TVs and other consumer and professional products at its Racine County plant in southeastern Wisconsin, which is under construction. It later said it would build smaller LCD screens instead, according to the Reuters report.

However, the company is considering scaling back or shelving those plans, the Reuters report said.

Woo told Reuters that the company was still evaluating options for Wisconsin, but cited the steep cost of making advanced TV screens in the United States, where labor expenses are comparatively high.

Hon Hai cannot compete in the U.S. TV market if it uses domestic labor to build LCD panels. “If a certain size of the display has more supply, whether from China or Japan or Taiwan, we have to change, too,” said Woo.

Rather than focusing on LCD manufacturing, Hon Hai wants to create a “technology hub” in Wisconsin that would largely consist of research facilities along with packaging and assembly operations, Woo said.

It would also produce specialized tech products for industrial, healthcare and professional applications, he added.―Focus Taiwan

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