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Foxconn confirms US investment talks after Trump boast

PTI Taipei | Updated on January 16, 2018

FOXCONN-RESULTS_   -  Reuters

US President-elect Donald Trump unveils a USD 50 billion deal with Foxconn and SoftBank

Taiwan’s tech giant Foxconn confirmed today it is in talks over a new US investment, while SoftBank shares soared after President-elect Donald Trump unveiled a USD 50 billion deal with the two firms.

Trump announced the agreement — which he said would bring 50,000 jobs — in the lobby of Trump Tower in New York, alongside SoftBank’s flamboyant chief executive Masayoshi Son.

Son brandished a document featuring the names of his firm and Foxconn which read: “Commit to invest USD 50bn + USD 7bn in US, generate 50k + 50k new jobs in US in next four years.”

Foxconn, a major supplier to Apple, confirmed in a statement it is “in preliminary discussions regarding a potential investment” that would expand its current US operations, but would give no further details. “We will announce the details of any plans following the completion of direct discussions between our leadership and the relevant US officials,” the statement said.

The firm is the world’s largest contract electronics maker and is best-known for assembling products for international brands such as Apple and Sony.

But as Apple diversifies its supply chain, Foxconn has branched out into robotics, e-commerce, telecoms and biotech.

Analysts said the potential deal reflected pressure on Apple to refocus on the US.

Trump campaigned on a platform of bringing jobs back to the US which he said were being taken away, particularly by China. “Trump is pressuring Apple to return to the United States and Foxconn as an Apple supplier is going there to be near its client to strengthen its ties with Apple,” said Arthur Liao, an analyst at Fubon Securities.

Liao said he expected the new investment to focus on automation, design, and research and development, rather than manufacturing due to high labour costs in the country.

Foxconn, also known as Hon Hai, employs around a million workers at its factories across China and has operations in more than 10 countries including Vietnam, Brazil and Mexico.

In the US, it has a plant in Virginia for packaging and engineering which employs over 400 people. It has also announced a USD 40 million investment in a facility in Pennsylvania to build precision tools and develop a robotics programme.

Foxconn founder Terry Gou and SoftBank’s Son are reported to be good friends — Foxconn recently contract manufactured Softbank’s talking humanoid “Pepper” robots, which have been introduced into workplaces around the world including in Taiwan.

Published on December 07, 2016

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