Apple suppliers Foxconn, Sharp, TSMC all weigh building manufacturing plants in USA

Posted:
in General Discussion edited January 2017
Three of Apple's key suppliers -- Foxconn and its subsidiary Sharp, as well as chipmaker TSMC --?have all expressed interest in taking advantage of business-friendly incentives proposed by incoming U.S. President Donald Trump, though no commitments have been made.




Foxconn and Sharp are considering building an LCD manufacturing plant in the U.S., a Sharp executive said Friday, according to Nikkei. While the option is "on the table," the unnamed executive said such a decision must be made "carefully."

If it happens, the plant could come as a result of SoftBank's $50 billion investment in the U.S., aimed at creating 50,000 jobs. SoftBank is a partner of Foxconn.

If a U.S. LCD plant from Sharp and Foxconn were to come to fruition, sources told Nikkei that it could be about the same size as a recently announced display manufacturing plant in Guangzhou, China. That facility, scheduled to open in the fall of 2018, has a price tag of $8.69 billion.

Foxconn officially acquired Sharp for $3.5 billion last March.




The report also reiterated that Foxconn itself is also exploring the possibility of moving manufacturing to the U.S. Those ongoing evaluations were first revealed last November, though the verdict has been mixed on whether such a move would be cost effective.

Separately, Apple chipmaker Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang said his company could also build a manufacturing plant in the U.S., according to DigiTimes. As with Foxconn and Sharp, Trump's talk of incentives for U.S. manufacturing have TSMC weighing their options.

Also as with Foxconn and Sharp, however, the possibilities are preliminary, at best. Chang himself cautioned that TSMC building chips in America "may not necessarily be a good thing."

Regardless, TSMC expanding to the U.S. is not a far-fetched concept: Competing Apple chipmaker Samsung builds iPhone chips at a fabrication facility located in Austin, Tex.

TSMC revealed that about 65 percent of its total wafer revenues in 2016 came from the U.S., and the company expects that America's share of its business will retain the lion's share in 2017.

Comments

  • Reply 1 of 10
    flaneurflaneur Posts: 4,511member
    An LCD plant? One would think OLED more likely. Isn't the Foxconn-Sharp plant in Guangzhou for OLED, which seems to be the future?


    edited January 2017
  • Reply 2 of 10
    macxpressmacxpress Posts: 4,934member
    And probably 90% of these factories will be robots so I don't see the advantage of doing this other than maybe tax dollars. I seriously doubt it will create a significant amount of jobs like Trump thinks it will. 
    badmonkapplepieguy
  • Reply 3 of 10
    am8449am8449 Posts: 343member
    I have a feeling some of this is political. Taiwan, being such a small country (or territory), relies heavily on both Apple's business and the US's protection from China, and needs to do whatever it can to appease PE Trump in order to keep the US as a close ally. It probably doesn't make much economic sense to manufacture in the US, except maybe to remove the threat of tariffs.
    badmonk
  • Reply 4 of 10
    macxpress said:
    And probably 90% of these factories will be robots so I don't see the advantage of doing this other than maybe tax dollars. I seriously doubt it will create a significant amount of jobs like Trump thinks it will. 
    Indeed, as no fat fingered American male will want, nor be able to do what those Chinese do, assembling iPhones out of hundreds of tiny tiny tiny parts day in day out.. I do hope Apple brings macbook air/pro/etc iMac 21/27/etc MacPro etc production to the US, they could do it without significantly increasing the product price.. And as those desktops and laptops have mostly larger parts, it could conceivably be assembled by American people... UPDAte: I must correct my self, the Mac Pro is already largely assembled in the US
    edited January 2017
  • Reply 5 of 10
    The overarching & unspoken reason for a potential move by these suppliers is to be able to continue production as a supplier to Apple and others when the international political scene becomes untenable in the Western Pacific. China/US problems are increasing, eventually putting all shipping, manufacturing, resourcing in jeopardy in the region. These issues are a real and present crisis, which has no easy solutions. Chinese civilian and governmental good will towards Apple and US as a whole is quickly waning, fostered by AntiAmerican rhetoric, if  it was ever genuine. This could well be a long term issue, putting historical expectations out the window. Trump era taxation is a secondary rationale.
    badmonk
  • Reply 6 of 10
    The correct term is "consider". "Weigh" carries the wrong implication.

    signed —
    The Grammer Rammer
    badmonk
  • Reply 7 of 10
    foggyhillfoggyhill Posts: 4,767member
    Just more corporate welfare.... Very few jobs for Trump voters.... But, as usual they'll applaud.

    Basically sold as protectionist shit that seems like a good idea for the moron voters but in fact will hike their taxes (or debt), hike their prices and produce no jobs... Nothing to see here.



    singularitynetroxlamboaudi4applepieguy
  • Reply 8 of 10
    misamisa Posts: 827member
    macxpress said:
    And probably 90% of these factories will be robots so I don't see the advantage of doing this other than maybe tax dollars. I seriously doubt it will create a significant amount of jobs like Trump thinks it will. 
    It's only going to create management jobs, little else.

    See Trump and various Liberal (not Conservative) types tend to think that jobs are being outsourced to save money and then that money goes into the pockets of the CEO directly, not to shareholders (as conservatives would prefer) and not to employees (as liberals would prefer.) So this is a very low hanging fruit to pick. However Trumps policy is more like chopping down the fruit tree to get the fruit, and it will never grow back. Instead of luring businesses back, he would rather go "ok I'm going to tear up the trade agreement with the country you outsource to, and stack 35% tariffs on your products imported."

    The problem with this thinking is that it will instead bankrupt companies to bring production to the US due to better environmental and job protection in the US. Trump can talk a big game, but at the end of the day, companies would rather just pay the tariff, and with no domestic competition in the US, US customers end up eating that tariff if they want the product anyway. So a $600 iPhone becomes a $1000 iPhone, big whoop, the people who buy them will cry about it, but it will become more of a luxury status item than it already is. A better strategy would be twisting China's arm a little and making them improve their working conditions so that a Chinese worker and an American worker are paid roughly the same. That keeps the playing field level.

    Who will actually be hurt by this are all the "cheap" products that have thin profit margins like Android phones and Tablets. They are not going to be producing their devices in the US, they can't afford to setup their own factories. Foxconn may build a factory here, if only to "finish" products in the US to duck tariffs, be they aren't going to move an entire production to the US, because that would mean they would need to ship parts or raw materials from Asia that would also be tariff'd to death. So the net result is that either you're paying 35% more for device you import from Asia, or you pay 35% more for a device who was assembled in the US but from Asian parts that a 35% tariff was paid on.

    This is why the Free Trade Globalization was a good thing, even if it meant losses of inefficient jobs. Does the world need a factory in every country to produce every product? No. It's a cycle, as better production methods are created, you cycle your factories to newer processes, and sell the old factory. Then the old factory is bought by another company to produce something that can better utilize the old production method. This is why we don't typically import baked goods (cookies, crackers and chips), or bottled beverages (eg orange juice, milk, sodapop) and instead have a domestic factory or bottler produce it instead. There also also localization issues (marketing, local tastes) that apply to foods that no other product needs. If only one country in the world produced cheap oranges, and one year a major blizzard destroys all the Orange trees, then without another country producing them, the prices for Oranges become unaffordable, and Oranges (and orange juice) never ever comes back into production because nobody can afford it. Producing Oranges in the Arctic is not efficient, but neither are the oranges can also be produced in the desert of California. However you can put a hothouse anywhere. It's just not cheap. 

    What I'm getting at is that the single-sourcing of most electronics is a high-risk thing that is a direct result of non-diversity in globalization. Instead of opting to source from multiple companies in multiple countries, in case there is a bad batch (see the exploding battery debacle) or disease wipes out the food sources in that country, or war or natural disasters (which have caused electronics prices to skyrocket before) you want at least ONE domestic source, and 2-3 "cheaper sources" to compliment your domestic source instead of outsourcing everything to one cheaper source, and then having that cheaper source cut you out and start selling your product as theirs in their own country. 

    Tariff's just cut off the cheaper sources and without a domestic source, you instead go bankrupt.
  • Reply 9 of 10
    1st1st Posts: 383member
    great news.  perfect timing to up grade the MFG to next gen.  100% depreciation in the same year of equipment purchase - perfect.  The only issue is where you can find some high level engineers in such a massive scale...(USA population is lower than china... STEM is high quality, but a bit less hands on type... Apple might want to open on site university -  stanford U did wonderful job on swift lecture... may be some hardware lecture and logistic). 
  • Reply 10 of 10
    ben20ben20 Posts: 120member
    Business-friendly incentives sounds good to me. Great article !
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