Foxconn investing $2.6B into new display factory that will exclusively supply Apple

Posted:
in iPhone edited November 2014
Foxconn's Innolux will build a new $2.6 billion sixth-generation plant in Southern Taiwan to supply displays exclusively to Apple, after the iPhone maker made an "urgent" request, it was announced on Thursday.

Reachability


The new plant from Foxconn-owned Innolux Corp. will begin mass production of panels exclusively for Apple by the end of 2015, according to a representative for the company who spoke with Bloomberg. Equipment installation is reportedly set to begin next month after Innolux received "an urgent request for exclusive capacity," the report said.

Foxconn Technology Group expects to spend $2.6 billion over the next two years on the factory, which will employ some 2,300 people at the Kaohsiung Science Park campus in Southern Taiwan.

Little else about the arrangement, including display types or even what devices Foxconn might be building screens for, is known. But in recent years, reports have claimed that Innolux Corp. has been gradually squeezing out longtime LCD supplier Samsung from Apple's supply chain.

Earlier this year, it was said that Apple tapped Innolux to supply the 4.7-inch Retina displays used in Apple's current iPhone 6. Other rumored LCD suppliers are LG Display and Japan Display.

Innolux is Taiwan's largest maker of LCD screens, and Apple uses LCD technology on most of its products, including the iPhone, iPad, its MacBooks and the iMac.

In a new direction, the company will use power sipping AMOLED technology for its upcoming Apple Watch, but those tiny wrist-worn displays are expected to cost considerably more per pixel than the LCD screens used on other Apple devices.
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Comments

  • Reply 1 of 56

    Here's the thing. If it really is an 'urgent' request, that tells you Apple's projections for iPhone demand show that it won't be decreasing any time soon. Obviously demand may ease a bit for the Plus, where they can get it in stock, but you don't request a 2.6 billion dollar plant to help cure a temporary supply issue.

     

    Shareholders, take note.

  • Reply 2 of 56
    Apple must be the biggest boon to Taiwan's economy and people in their country's history. Well, if Ireland ever succumbs to EU pressures, I know where Apple could relocate their overseas operations...and probably completely tax-free.
  • Reply 3 of 56
    MacProMacPro Posts: 17,382member
    On top of this, there must be a lot of capacity for production freeing up as Android CrapWare production slips. Apple can soak up all the production capacity there is I would think as Apple heads to the Trillion $ mark in a few years.
  • Reply 4 of 56
    MacProMacPro Posts: 17,382member
    Here's the thing. If it really is an 'urgent' request, that tells you Apple's projections for iPhone demand show that it won't be decreasing any time soon. Obviously demand may ease a bit for the Plus, where they can get it in stock, but you don't request a 2.6 billion dollar plant to help cure a temporary supply issue.

    Shareholders, take note.

    I can hardly watch AAPL these days, it's too damned exciting ... every $10 or so I see a six digit gain overall. This from quite a modest investment back when our broker told us we were nuts and demanded we signed waiver exonerating him for going against his advice.
  • Reply 5 of 56
    I can hardly watch AAPL these days, it's too damned exciting ... every $10 or so I see a six digit gain overall. This from quite a modest investment back when our broker told us we were nuts and demanded we signed waiver exonerating him for going against his advice.

    I hope you fired that broker.
  • Reply 6 of 56
    malaxmalax Posts: 1,598member
    I can hardly watch AAPL these days, it's too damned exciting ... every $10 or so I see a six digit gain overall. This from quite a modest investment back when our broker told us we were nuts and demanded we signed waiver exonerating him for going against his advice.

    Congratulations on owning 10,000 shares of AAPL. You must represent the "1%" of our little commentator community.
  • Reply 7 of 56
    Quote:
    Originally Posted by digitalclips View Post





    I can hardly watch AAPL these days, it's too damned exciting ... every $10 or so I see a six digit gain overall. This from quite a modest investment back when our broker told us we were nuts and demanded we signed waiver exonerating him for going against his advice.



    I wish I owned that many shares. I bought what I could at the split...which wasn't much lol. Still, I'm well in the black.

     

    And yes, it definitely makes their success that much more exciting.

  • Reply 8 of 56
    malaxmalax Posts: 1,598member
    Here's the thing. If it really is an 'urgent' request, that tells you Apple's projections for iPhone demand show that it won't be decreasing any time soon. Obviously demand may ease a bit for the Plus, where they can get it in stock, but you don't request a 2.6 billion dollar plant to help cure a temporary supply issue.

    Shareholders, take note.
    On the other hand Tim Cook would advise against making investment decisions based on what you think you know about Apple's supply chain. In theory this could be a result of someone else's screw up rather than unexpected demand. (But I agree with you that it's probably a positive sign.)
  • Reply 9 of 56
    Quote:
    Originally Posted by malax View Post





    On the other hand Tim Cook would advise against making investment decisions based on what you think you know about Apple's supply chain. In theory this could be a result of someone else's screw up rather than unexpected demand. (But is agree with you that it's probably a positive sign.)



    True, and I'm certainly not giving investment advice, just calling attention to it.

  • Reply 10 of 56
    I can hardly watch AAPL these days, it's too damned exciting ... every $10 or so I see a six digit gain overall. This from quite a modest investment back when our broker told us we were nuts and demanded we signed waiver exonerating him for going against his advice.

    My mother was strongly told to diversify in the $100-150 range(pre split). She diversified by buying Apple in ALL of her accounts.
  • Reply 11 of 56
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    Here's the thing. If it really is an 'urgent' request, that tells you Apple's projections for iPhone demand show that it won't be decreasing any time soon. Obviously demand may ease a bit for the Plus, where they can get it in stock, but you don't request a 2.6 billion dollar plant to help cure a temporary supply issue.

     

    Shareholders, take note.




    would be nice if this forecasted demand is for a new product. Maybe the ever elusive, full-sized Apple TV, or something home or auto related.

  • Reply 12 of 56
    Quote:

    Originally Posted by CustomTB View Post



    My mother was strongly told to diversify in the $100-150 range(pre split). She diversified by buying Apple in ALL of her accounts.

    I occasionally get calls about "excessive concentration" in my IRA. Those $24 (pre-split) shares are doing nicely.

  • Reply 13 of 56
    We all have to remember that the whole market could drop 30% or so at any time. The market has not corrected since 2008. The fed QE and interest rates of 0% have made a market that is not normal. It's a bit of a repeat in behavior after 2001 and we know how 2008 turned out.

    People are wetting themselves over Apple stock. It doesn't operate in a vacuum.

    A black swan event could happen today or next month or in 3 years.

    Hopefully people are diversified with a risk they are willing to take.

    Your stocks are worth nothing until you sell!

    I'm in total market vanguard index funds and bonds and have a bunch in a stable fund to spend when the market corrects.

    To each his or her own. Good luck.
  • Reply 14 of 56
    They ws
    plovell wrote: »
    I occasionally get calls about "excessive concentration" in my IRA. Those $24 (pre-split) shares are doing nicely.
    They want to sell you mutual funds so They make more money. No thank you.
  • Reply 15 of 56
    iqatedoiqatedo Posts: 1,545member

    In 1854, Commodore Matthew Perry, who had the year before forced the Tokugawa Shogunate in Japan to sign a treaty with the US, dropped anchor of Formosa, now Taiwan, for 10 days. He recommended that the island be occupied as it had reserves of coal that would be useful for the new steam powered warships the US navy was using. President Franklin Pierce declined, demurring at the cost. Imagine the outcome of a different response in DC.

  • Reply 16 of 56
    Quote:
    Originally Posted by CustomTB View Post



    They want to sell you mutual funds so They make more money. No thank you.

    Sometimes I just say "no". Other times I play them on a bit and ask for their recommendations for stocks that will perform as well, or close. "How should I invest the funds I get from selling the Apple shares?"

     

    Lots of mumble-mumble at that point and they soon find a way to end the call.

  • Reply 17 of 56
    MacProMacPro Posts: 17,382member
    sog35 wrote: »
    I hope you fire your broker.

    Most brokers are useless or worse dangerous. There main job is to sell products to their 'customers'. The facts show that index funds that charge close to ZERO beats managed funds 80% of the time.

    So you own close to $1,000,000 in Apple shares?

    Almost, which is why I said $10 or so, ... but we have all dividends ploughed back in automatically for more shares so we inch closer.

    I am not so down on the broker to be honest. Back them he would have been derelict in his duty to allow someone to move so much of their holdings from safe funds into high risk without some serious warnings. It was a heck of a gamble but I weighed it very carefully and even though I never gamble, did!
  • Reply 18 of 56
    MacProMacPro Posts: 17,382member
    sog35 wrote: »
    LOL. If you believe in Apple long term it won't matter if the market collapses.

    Look at Apple's price in 1999 and then now.
    Look at Apple's price in 2001 and then now.
    Look at Apple's price in 2008 and then now.

    The USA stock market won't collapse unless we have a recession.  And even if we do Apple will recover like the broad market.
    In YTD Apple is over performing the market by 400% so your theory that Apple follows the market is not true.

    IMO, trying to time broad market moves is impossible and dangerous. Staying out of the market for a few months could cause you to lose BIG MONEY. There were tons of people saying we were due for a correction in 2012 and if you listen to them you missed on MASSIVE gains.

    In fact when the market went down for much of the time Apple went up! It is quite often counter to the market, so much so i often wonder if it is seen as an alternative to bonds and gold by some!
  • Reply 19 of 56
    kibitzerkibitzer Posts: 1,113member
    customtb wrote: »
    My mother was strongly told to diversify in the $100-150 range(pre split). She diversified by buying Apple in ALL of her accounts.
    Attagirl! Just so long as she can abide those periods when the market value might sag as much as 40%, as it did for a time within the last two years. Patience and perseverance. Long-term AAPL owners have seen how consistently strong the company's fundamentals have continued over the years, especially when compared to some of the crap that brokers and investment advisers so often tout.

    Diversification for diversification's sake is no way to protect a portfolio if the other stocks are candidates to take big price hits in the next downturn.
  • Reply 20 of 56
    rob53rob53 Posts: 1,880member

    Quote:
    Originally Posted by digitalclips View Post





    I can hardly watch AAPL these days, it's too damned exciting ... every $10 or so I see a six digit gain overall. This from quite a modest investment back when our broker told us we were nuts and demanded we signed waiver exonerating him for going against his advice.

     

    Originally Posted by malax View Post





    Congratulations on owning 10,000 shares of AAPL. You must represent the "1%" of our little commentator community.



    As late as June 2002, AAPL was an adjusted $1/share. Now it's sitting around $114. 10K shares were 1400+ shares prior to last split, 700 before the split in 2005, and 350 before the split in 2000. Starting with 350 shares back in the late 20th century wouldn't have been such a big deal. They didn't cost $465 (my entry point). digitalclips just acted like a true investor, investing for the long run. Yes, this make digitalclips the 1% (or less) of of current gablers/investors but I'm sure there are plenty of people who have held onto their AAPL shares for 20 years or so. Two of my brothers have owned AAPL for at least that long.

     

    2:1 split June 2000, 2:1 split Feb 2005, 7:1 split June 2014. 

     

    My financial person also said to sell before it hit $700 but I told him I was going to hang on. I just wish I put more of my retirement money into AAPL but then it would have dropped.That's my luck. So far I've made 70% in a little over 15 months. I'll take that any day.

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