Foxconn’s Wisconsin Site Will No Longer Be a Factory for Smartphone Displays, Instead Focusing on R&D

Foxconn is once again changing plans for its upcoming Wisconsin-based plant in the United States, according to a new report out today by Reuters. Originally set to produce large television displays, and then small to medium displays for smartphones, the location will now pivot to become largely focused on research and development.


Foxconn intends to hire "mostly engineers and researchers" instead of manufacturing workers at the Wisconsin plant. The plans to build smartphone displays, for companies like Apple, have either been greatly scaled back or shelved completely. This information comes from Louis Woo, assistant to Foxconn CEO Terry Gou.

Although the company has yet to formally announce this pivot, Woo says that Foxconn is "not building a factory" in Wisconsin at this point. According to Woo, the steep cost of making advanced screens for TV sets and other devices in the United States led to the decision.

Instead, Woo notes that Foxconn's more profitable solution is to make LCD panels in greater China and Japan, ship them to Mexico for final assembly, and import the finished products to the United States.
Rather than a focus on LCD manufacturing, Foxconn wants to create a “technology hub” in Wisconsin that would largely consist of research facilities along with packaging and assembly operations, Woo said. It would also produce specialized tech products for industrial, healthcare, and professional applications, he added.

“In Wisconsin we’re not building a factory. You can’t use a factory to view our Wisconsin investment,” Woo said.
The Wisconsin project was announced at the White House in 2017, and was used as an example by the Trump administration of a foreign company extending its manufacturing business into the United States. Now, Woo says that three-quarters of the Wisconsin plant will be staffed by people in R&D and design fields, or "knowledge" positions, rather than blue collar manufacturing jobs.

At the time, Foxconn said it would grow to employ as many as 13,000 workers at the site. In recent weeks, the company confirmed it had slowed its pace of hiring, down to about 5,200 people by the end of 2020. Now, a source within the company claims that figure is closer to 1,000 workers to start off. It's unclear if Foxconn still plans to grow to the full 13,000 workforce, and if so when that will happen.

Tag: Foxconn

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iPhone Assembler Foxconn Looks to India to Diversify Supply Chain Away From China

A larger portion of the world's iPhones could one day be manufactured in India, if a new report by the Wall Street Journal proves accurate.

According to Tuesday's report, Apple's main iPhone assembler Foxconn is considering building production plants in India as a way to diversify its supply chain away from China, where most of the Taiwan-based firm's facilities currently reside.

Executives at Foxconn, a contract manufacturer that assembles a large portion of the world’s iPhones in China, are studying whether to include an India project in budget plans, one of the people said. Senior executives, possibly including Chairman Terry Gou, plan to visit India after next month’s Lunar New Year to discuss plans, the people familiar said.
Apple currently manufactures most of its iPhones through Foxconn, but the latter's potential new project in India points to Apple's vulnerability to rising U.S.-China tensions over trade and technology. Both Apple and Foxconn declined to comment on today's report, but it is thought that manufacturing iPhones in India could help Apple lower prices by allowing it to avoid a tariff that adds 20 percent to devices imported from China.

Foxconn already has plants in India, and late last year it was reported that the firm would invest around $356 million to expand its facilities there to begin assembling Apple's high-end iPhones. Wistron assembles iPhone SE and iPhone 6s models in India exclusively for the Indian market, but the December report didn't say whether the high-end iPhones assembled by Foxconn would be sold in the country or elsewhere in the world.

Early last year, Apple revamped its India strategy in order to stay afloat in the country's smartphone market. This strategy includes better and longer-lasting retail deals with higher sales targets, the debut of official Apple retail stores in India, and an overhaul of the company's relationship with independent retailers.

Just one in four Indians own a smartphone, providing Apple with an opportunity to sell iPhones to millions of new customers in the country. However, Apple is said to have seen little success so far, with Apple's market share in the country dropping to about one percent in 2018, from about two percent the previous year.

Tags: Foxconn, India

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Foxconn Cut 50,000 Contract Workers Months Ahead of Schedule Due to Poor iPhone Demand

Apple supplier Foxconn has let go around 50,000 contract workers at its iPhone factory in Zhengzhou, China, with the first cuts happening in October 2018. As one source with knowledge of Foxconn's plans told Nikkei, the scale of the cuts is not what stands out, but the fact that it's significantly earlier than previous years.

"It's quite different this year to ask assembly line workers to leave before the year-end," the source stated. Foxconn typically renews workers' contracts every month from August until January, at which point the workforce is scaled back for slow iPhone production season. This year, those cuts came as much as three months early.


The same is true for other Apple suppliers according to today's report, with Pegatron canceling monthly labor contracts last November. One source said that Pegatron's cuts "happened sooner than in the past because of poor demand," referring to the iPhone.

Even smaller companies in Apple's supply chain reportedly cut down on their workforce, with one unnamed component supplier based in Shenzhen asking 4,000 workers to take an extended vacation from October to March. On March 1, the company will decide whether or not to lay the workers off.

For Foxconn, the company is preparing for restructuring throughout the company, merging business units that make iPads and MacBooks with the division making Dell and Acer computers. This means "steep cuts" to management, human resources, administrations, accounting, and utility support jobs, totaling 100,000 jobs removed by the end of 2018 and costs cut by $2.96 billion in 2019.

Apple in late December told its suppliers to cut production on new iPhones by 10 percent over the next three months, coming on the back of reports about weak iPhone sales during the holiday quarter. In early January, Apple CEO Tim Cook called reports claiming the iPhone XR was a flop "bologna," stating the device has been the most popular iPhone "every single day" since it launched.

Amid all of this, many Apple suppliers cut their 2019 sales forecasts, including Taiwan Semiconductor Manufacturing Company and Nidec. Specifically for the China market, these suppliers noted an "extraordinary" drop in demand for high-end smartphones.

Tag: Foxconn

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Apple Partnering With Foxconn to Build High-End iPhone Models in India Next Year

Following the iPhone SE and iPhone 6s, Apple will begin assembling its high-end iPhones in India sometime in 2019, according to a new report today by Reuters. Instead of Wistron, Foxconn will build the high-end iPhones, and these models are said to be the most expensive flagship devices offered by Apple, including the iPhone X family.


Local sources state that the work will occur in Foxconn's plant in Sriperumbudur town in the southern state of Tamil Nadu. Foxconn will reportedly invest 25 billion Indian rupees ($356 million) to expand the plant, part of which will be focused on the production of the flagship iPhones in India. The investment is estimated to create as many as 25,000 jobs. The report doesn't say whether these high-end iPhones will be sold in the Indian market or elsewhere in the world.

Earlier this year, Apple revamped its India strategy in order to stay afloat in the country's smartphone market. This revamped strategy includes better and longer-lasting retail deals with higher sales targets, the debut of official Apple retail stores in India, an overhaul of the company's relationship with independent retailers, and improving apps and services for local users. This is said to include a new version of Apple Maps aimed at Indian users to launch by 2020.

The expansion of high-end iPhone assembly outside of China could also be an attempt by Apple to "limit the impact" of a trade war between the United States and China:
For Apple, widening assembly beyond China is critical to mitigate the risks of the Sino-U.S. trade war. Foxconn, the world’s biggest electronics contract manufacturer, is considering setting up a factory in Vietnam, Vietnamese state media reported this month. If that goes ahead, it will be one of the biggest recent steps by a major company to secure an additional production base outside of China.

Foxconn has previously admitted the China-U.S. trade spat was its biggest challenge and that its senior executives were making plans to counter the impact. “Widening iPhone manufacturing in India through Foxconn will allow Apple to hedge the risk of any new U.S. trade policies,” said Navkendar Singh, an associate research director at International Data Corporation.
Still, the company has struggled in the country due to the high price of its iPhones. Just last week, The Wall Street Journal published a report about Apple's iPhone sales in India. According to the paper, Apple has had "little success so far" in terms of growth in India, due to the price-sensitive market that has more than 75 percent of smartphones priced below $250.

Tags: Foxconn, India

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iPhone Suppliers TSMC and Foxconn Report Strong November Revenue

Two of Apple's largest suppliers have reported healthy jumps in monthly revenue, suggesting fears of weak iPhone demand may be overblown (via Bloomberg).

Asian firms TSMC and Foxconn (Hon Hai) both posted a 5.6 percent rise in November sales, reversing a recent trend of Apple suppliers reducing production or revenue outlooks to reflect lowering demand for Apple's smartphones.


Foxconn posted NT$601.4 billion ($19.5 billion) in revenue, a record for the month of November, which puts the iPhone assembler on track for its fastest pace of annual growth in years.

TSMC, maker of Apple's system-on-chips like the A12 processor, reported revenue of $3.1 billion, a lower figure than the previous month but still considered strong overall. Executives at the chipmaker have said they expect demand for premium devices to help offset lethargy in the crypto-mining market, which it has heavily invested in.

Apple accounts for close to half of main iPhone-assembler Hon Hai's revenue and about a fifth of TSMC's, according to data compiled by Bloomberg.

The figures offer something of a riposte to the narrative that sales of Apple's iPhone XR and XS have been weaker than expected. For example, last week it was reported that Apple moved marketing staff off other projects to focus on bolstering sales of the latest iPhone lineup in late October.

Apple's next earnings call is in January, when investors will get an idea of how the company did over the holiday season, although Apple recently stopped reporting real unit numbers for its major product categories, so investors will have to rely on revenue and gross margin figures alone to assess performance.

Related Roundups: iPhone XS, iPhone XR
Tags: TSMC, Foxconn

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Apple Has Certified Key Suppliers of 2018 iPhones as Volume Production Set to Begin

Apple has successfully completed certification of key component suppliers for its widely rumored trio of 2018 iPhones, expected to be announced in September, according to Taiwanese publication Economic Daily News.

2018 iPhone imitation models via Marques Brownlee/MKBHD

The report claims that these suppliers have begun shipping large quantities of camera lenses, metal chassis, and other components to larger manufacturers, including Foxconn, which is expected to assemble the majority of 2018 iPhones, according to Taiwanese research firm Fubon Securities.

In particular, Fubon Securities said Foxconn will assemble every second-generation iPhone X, 90 percent of units for the so-called iPhone X Plus, and 75 percent of units for an all-new, lower-priced 6.1-inch iPhone. Taiwanese manufacturer Pegatron is said to fulfill all of the remaining orders.

While the supply chain is clearly gearing up for 2018 iPhones, it's unclear when volume production of fully-assembled devices will begin. Foxconn recently began its seasonal hiring spree in preparation.

Foxconn typically ramps up manufacturing of new iPhones over the summer, for release in September, but last year was somewhat of an anomaly. While the iPhone 8 and 8 Plus launched in September, the iPhone X was delayed until November 3, reportedly due to TrueDepth sensor-related manufacturing challenges.

Back in June, oft-reliable Apple analyst Ming-Chi Kuo said all three 2018 iPhones will be both announced and available to order this September, but Morgan Stanley analyst Katy Huberty recently cautioned that the 6.1-inch iPhone with an LCD may not launch until October due to possible issues with backlight leakage.

Of course, the 6.1-inch iPhone could end up being available to order in September with a 4-6 week shipping estimate.

As far as pricing is concerned, Kuo expects the second-generation iPhone X to start at $799 to $899, the so-called iPhone X Plus to start at $899 to $999, and the 6.1-inch iPhone with an LCD to start at $599 to $699.

If those price points prove to be accurate, we suspect the second-generation iPhone X would start at $899, with the iPhone X Plus taking over the $999 price point, and the 6.1-inch model serving as somewhat of a budget iPhone X with a $699 price tag — all, of course, based on base storage capacities.

Apple's usual September event will likely take place in almost exactly a month, so there isn't much longer until we know for certain.

Related Roundup: 2018 iPhones
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Foxconn Begins Seasonal Hiring Spree Ahead of 2018 iPhones

Apple supplier Foxconn is gearing up to hire more workers for its plants in Zhengzhou, China by offering bonuses to workers who help assemble Apple's 2018 iPhones. According to a new report by the Economic Daily News, the supplier is offering one-off bonuses of up to CNY 2,000 (US $295) to workers who renew their contracts at this time (via DigiTimes), and the hiring campaign is expected to last through November 2018.

Suppliers typically begin their hiring sprees in the summer months in preparation for the annual fall iPhone launches, with Foxconn and Pegatron initiating hiring campaigns as early as May in 2016 and June in 2014.

Renders of the three iPhones expected to launch this fall

The report also points back to the "weaker-than-expected" profits that Foxconn received in the fourth quarter of 2017 following the November launch of the iPhone X, believed to be due to the high pre-production costs of the smartphone. In an effort to prevent this from happening again in 2018, the supplier is applying "stricter cost management" to its iPhone production process.

Foxconn is expected to assemble the majority of Apple's three iPhone models coming out later this year, including all of the second-generation iPhone X, 90 percent of the "iPhone X Plus," and 75 percent of the lower-priced 6.1-inch iPhone. This news came in a report by the Taipei Times last month, which claimed that the rest of the 2018 iPhone orders will be fulfilled by Taiwanese manufacturer Pegatron.

News surrounding the ramp-up of iPhone production usually begins around this time of year, with the majority of reports typically hitting in August and focusing on iPhones entering volume production and the supply chain facing shortages. Other Apple suppliers have also been at the center of production ramp-up stories, including TSMC about a month ago when DigiTimes reported that the company has begun commercial production of chips manufactured using its 7-nanometer process, including Apple's A12 processor.

Suppliers are getting ready for what is expected to be a global launch of the 2018 iPhone models this September, following Apple's annual iPhone reveal event. Apple analyst Ming-Chi Kuo believes Apple will release all three new iPhones in September with an aggressive pricing strategy: the 6.5-inch OLED iPhone will be priced at $900 to $1,000, the 5.8-inch OLED second-generation iPhone X will be priced at $800 to $900, and the 6.1-inch LCD iPhone will be priced at $600 to $700.

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Foxconn Expected to Assemble Bulk of 2018 iPhones

Taiwanese manufacturer Foxconn will assemble the majority of Apple's widely rumored trio of new iPhones expected to launch in 2018, according to the Taipei Times, citing research from Fubon Securities.


Foxconn, formally known as Hon Hai, will reportedly assemble all of the second-generation iPhone X, 90 percent of the so-called iPhone X Plus, and 75 percent of an all-new, lower-priced 6.1-inch iPhone.

Taiwanese manufacturer Pegatron is said to fulfill the remaining orders:
Hon Hai has been selected to assemble the bulk of the new iPhones, including all of the premium 5.8-inch OLED model and 90 percent of the 6.5-inch OLED phones, as well as 75 percent of the 6.1-inch LCD model, with the remainder given to Pegatron, the report said.
Wistron, another Taiwanese manufacturer, will not assemble any of the new 2018 iPhones, according to the report.

Fubon Securities predicts that the 6.1-inch iPhone will be priced around $799 in the United States, and use nearly all of the same materials as the iPhone 8 Plus, at an estimated cost of $275 to Apple.

Last month, respected Apple analyst Ming-Chi Kuo said all three new iPhones will be both announced and made available to order this September. In a previous research note, he indicated that Apple has resolved the manufacturing challenges that resulted in the iPhone X's delayed launch and supply shortage.

Related Roundup: 2018 iPhones

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Foxconn’s Wisconsin Plant Pivoting From Large to Small-Medium Displays in Cost-Cutting Measure

Apple supplier Foxconn Technology Group is making a shift in its expansion plans to Wisconsin in the United States, where it will now produce small to medium-size displays for Apple and other customers. This is a change from its original plan of having the Wisconsin plant produce large television displays, and the move to smaller displays is said to help lower initial costs at the factory (via Nikkei).


In total, Foxconn's Wisconsin plant will make displays for car infotainment systems, personal computers, tablets, smartphones, smaller televisions, and other "niche products." If the supplier kept on track with building large TV displays, the output would have required a "more complete" local supply chain lacking in the state, and a greater initial monetary investment for production equipment.
"Previously, Foxconn planned to build a 10.5th-generation display manufacturing factory, which is more suitable for large-sized displays," supply chain sources told Nikkei.

"But later they figured out that it might be more feasible and efficient to build a sixth-generation display plant or an 8.5th-generation factory from which they could move some equipment from Asia."
The incomplete local supply chain is believed to have been one of the bigger obstacles to Foxconn's large panel plans in Wisconsin. Sources speaking to Nikkei said, "It would require other companies like Corning to also set up a glass substrate facility nearby, as it's almost impossible to ship fragile, huge size glass materials from a distant place."

Foxconn has been open to building a facility in the U.S., with news becoming more frequent in late 2016 and the eventual Wisconsin home tipped by sources speaking with The Associated Press in June 2017. Foxconn confirmed the Wisconsin/TV display plant later in the summer, with plans of investing $10 billion into the location and initially employing 3,000 workers, with the potential to expand to as many as 13,000.

As Apple CEO Tim Cook pointed out in a recent interview, many parts of the iPhone are created in the U.S. (like the display glass and Face ID module), but the components manufactured in the U.S. are then shipped abroad, with devices assembled by suppliers like Foxconn in China. Because of this, Cook said: "It's not true that the iPhone is not made in the United States. We have always made the parts here. People just look at where the final product is assembled." In a global world, Cook explained, manufacturing and assembly needs to be done in a variety of places.

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Foxconn Acquires Popular Accessory Maker Belkin Along With Linksys and Wemo

Foxconn is best known as an Apple supplier that assembles Apple's devices and supplies components to the Cupertino-based company, but as of today, it's taking over a major Apple accessory maker.

Foxconn Interconnect Technology (FIT), a Foxconn subsidiary, today announced that it has acquired Belkin International in a deal that's worth $866 million. The acquisition includes the Belkin brand along with Linksys, Wemo, and Phyn, other companies owned by Belkin.

One of Belkin's recently introduced wireless charging accessories

The acquisition will allow Foxconn Interconnect Technology to "further tap into premium accessories and the smart home market." The deal is also expected to expand Belkin's presence both in the United States and "key markets globally."
"FIT is excited to acquire Belkin and its capabilities in the premium consumer products space," said Sidney Lu, CEO, FIT. "Integrating Belkin's best-in-class capabilities and solutions into FIT, we expect to enrich our portfolio of premium consumer products and accelerate our penetration into the smart home."

"This move will accelerate our vision of delivering technology that makes the lives of people around the world better, more convenient and more fulfilling. I am thrilled to take our brand portfolio of Belkin, Linksys, Wemo and Phyn to new heights," said Chet Pipkin, CEO and founder, Belkin International. "We see significant synergies with FIT, including leveraging its world-class manufacturing capability to enhance Belkin's operating efficiency and competitiveness. The transaction also grants us access to more resources to invest in our people and to aggressively pursue opportunities in the marketplace."
Under the Belkin brand, Belkin offers a wide range of iPhone, iPad, and Apple Watch cases, cables, adapters, wireless chargers, and more, while the Wemo brand offers HomeKit-compatible home automation devices. Through Linksys, Belkin sells wireless routers and similar accessories, and the Phyn brand offers a smart water assistant for monitoring for leaks.

All of the Belkin-owned brands will continue to operate as subsidiaries under Foxconn Interconnect Technology.


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