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Taiwan electronics giant Foxconn has downgraded its manufacturing investment into Wisconsin, amid much confusion. Erika Morphy reports.

Over a period of a few days beginning at the end of January, Foxconn Technology Group backed out of its commitment to manufacture advanced liquid crystal display (LCD) panels in the US state of Wisconsin.

However, within 24 hours it reversed course after a phone call with US president Donald Trump. It now seems that the company will not be developing the original promised factory and it is unclear whether it will ultimately hire the 13,000 manufacturing workers that it had promised.

From the beginning, the Foxconn factory in Wisconsin turned heads. Announced in 2017, the 1.8 million-square-metre campus was going to be the largest greenfield investment by a foreign-based company in US history. Foxconn would manufacture large-screen displays for televisions and other products at the facility. Later, it would decide to build small screens instead.  

The state incentives were a whopping $3bn and drew criticism that Wisconsin was giving up too much. Yet the pay-off was tantalising: in return, the state of Wisconsin would receive 13,000 manufacturing jobs and a $10bn LCD factory.

So it came as a shock when at the end of January a Reuters exclusive reported that Foxconn had apparently changed its mind. Louis Woo, special assistant to Foxconn chief executive Terry Gou, told Reuters that Foxconn now wanted to create a “technology hub” that would consist of research facilities and packaging and assembly operations. It would hire mostly engineers and researchers, instead of offering coveted manufacturing jobs.

As for the television screens, Woo told Reuters: “In terms of television, we have no place in the US. We can’t compete.”

After the interview was published, Mr Trump stepped in. A day later Foxconn released a statement that said that after a conversation between Mr Trump and Mr Gou, “Foxconn is moving forward with our planned construction of a Gen 6 fab facility”. A Gen 6 facility is smaller than the facility that Foxconn said it would build but larger than the technology hub that the company described to Reuters.

This article is sourced from fDi Magazine
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