As was speculated by The Wall Street Journal and Business Network CNBC, Foxconn, the prime contract manufacturing partner for Apple, has indeed made its announcement regarding a significant manufacturing investment in the U.S.

At a White House ceremony held late this afternoon, Foxconn Chairman and CEO Terry Gau made the announcement flanked by a host of Wisconsin State and U.S. Congressional leaders, and later, President Trump. The new $10 billion factory, to be located and built in Southwest Wisconsin represents an initial investment planned by Foxconn designed to rebuild a high-tech electronics supply chain within the United States. 

Wisconsin Governor Scott Walker indicated to the audience that the Foxconn manufacturing campus will span 20 million square feet, which is a considerable footprint. The Governor further coined a new term: “Wisconn Valley”, a new global center for cutting-edge technology.

According to reports, the Wisconsin plant will employ upwards of 3000 people initially and as many as 13,000 people at peak capacity. Further indicated was that upwards of 22, 000 indirect jobs could also come from the new plant at peak. CEO Gau indicated in the White House ceremony that Foxconn, through its new subsidiary, Sharp Corporation, will introduce the latest 8K LCD technology for applications across many industries including automobile displays, medical devices, televisions, and smartphones.

According to various remarks made at the ceremony, upwards of $3 billion in economic incentives were provided to Foxconn to sweeten the decision to locate in Wisconsin. That is also a very significant number.

As noted in our Supply Chain Matters blog update earlier this week, this announcement has a lot of association with Foxconn’s prime customer, Apple. On Tuesday, in an interview with The Wall Street Journal, President Trump disclosed that Apple CEO Tim Cook has committed to build three large manufacturing plants in the U.S., which represents an unprecedented announcement. A White House official further indicated that the Apple plants were in-addition to that of Foxconn. Apple declined to confirm to the WSJ regarding the President’s announcement.

Also this week, LCD manufacturer LG Display announced plans to invest $7 billion on ramping up OLED panel production volume at its South Korean production facility, indicating that some of the funding would come from a “strategic partnership” but declined to name that partner. Speculation in high tech circles is that the partner may be Apple, to lesson dependence on supplier and rival Samsung Electronics.

From our Supply Chain Matters lens, there is no taking away that today’s announcement is incredibly significant from many dimensions, be they high tech electronics and automotive supply chains, transportation, and to little surprise, political dimensions.

High tech and automotive supply chains gain a domestic source of advanced LCD panels without the burden of transportation costs from Asia. In turn, the opportunity for more-timely product design collaboration and time-to-market for new screen designs becomes more viable when working in a local time zone and with the tech center a mere few hours away.

The announcement if a feather in the cap of the Trump Administration’s commitment to revive U.S. manufacturing. There are other political dimensions as-well, namely that the President continues to directly interact with manufacturing company CEO’s to extract promises for added U.S. jobs in return for other legislative priorities. The White House was quick to indicate that corporate tax reform is another important part of the President’s legislative agenda.

There are obviously more announcements forthcoming, many of which could be related to a high-tech electronics supply chain renewal across the United States.

In the realm of global supply chain management, today’s announcement by Foxconn is a big, big, very big deal. (Yes, this is a Trump style descriptors)

Congratulations to all involved.

 

Bob Ferrari

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