Fox­conn may in­vest $5.7b in Nan­jing units

Phone and R&D plants, other fa­cil­i­ties may help ex­pand pres­ence in main­land

China Daily (Hong Kong) - - BUSINESS - By FAN FEIFEI in Bei­jing and CANG WEI in Nan­jing Con­tact the writ­ers at fan­feifei@chi­nadaily.com.cn

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.

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