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Terry Gou, the outspoken founder and chairman of Apple’s largest iPhone assembly partner, Foxconn/Han Hai Precision Corp., all but confirmed that his company and Apple are currently mulling the prospect of investing in a joint-venture. This venture aims to develop a $7 billion display manufacturing plant here in the United States, according to a report first published in the Nikkei Asian Review.
“Apple is willing to invest in the facility together because they need the [panels] as well,” Gou told reporters, adding that the U.S.-based production facility will have the potential to create anywhere between 30,000 and 50,000 jobs.
The Chinese consumer electronics Tycoon cited the growing demand for larger display panels as the reason that a U.S. production facility makes sense, particularly in relation to the high cost of importing parts from China. On the whole, however, the cost of manufacturing consumer electronics in the U.S. is generally much higher, due in part to higher labor costs and fluctuations in currency values.
Gou noted that his company is also in the process of planning to erect a new molding plant in the United States. This could potentially be developed in the state of Pennsylvania, pending talks with state regulators that are currently underway.
This increased interest in developing products in the U.S. comes amidst the bounty of “very large tax cuts” and other incentives promised to companies who repatriate their overseas manufacturing jobs back to America. This is a part of President Donald Trump’s bold campaign promise of growing domestic manufacturing jobs. To that end, Trump also campaigned on the promise of renegotiating or, if his administration sees fit, completely withdrawing from the North American Free Trade Agreement (NAFTA). This historic, three-nation trade deal effectively upended barriers, promoting the flow of goods across Canadian, U.S., and Mexican borders. Gou, however, noted that a retooling of the NAFTA agreement could potentially result in the Canadian, interactive display manufacturer, Smart Technologies, being relocated to the U.S. as a result of President Trump’s efforts to skew the agreement in favor of U.S. interests.
In addition to sweeping, corporate tax cuts, the Foxconn chairman also laid the case for the U.S. government to provide more in the way of land and electricity concessions He believes this would greatly encourage manufacturing in the country — after warning, of course, that electronic devices manufactured stateside could otherwise become unreasonably expensive.
“In the future they [shoppers] may be paying some $500 more for products, but those do not necessarily work better than a $300 phone,” Gou explained.
The incoming Trump administration has promised a slew of business-friendly tax incentives, which have so far piqued the interests of corporate entities, big and small. However, Gou remained adamant about his firm’s intent to expand on its home turf, as well, citing the tentative development of Foxconn and Apple’s fancy new prototype lab in the Shenzhen province of mainland China.