Foxconn to be Transformed from an OEM into a Systems Integrator and Component Supplier
September 04, 2017
Foxconn Electronic’s decision to invest US$10 billion in the US, which will include the establishment of a 10.5G TFT-LCD panel plant in Wisconsin, is designed to help the company move closer to its clients and accelerate its corporate transformation, according to Digitimes Research. The planned 10.5G LCD plant in Wisconsin will be constructed in five phases reaching 100K substrates/month with commercial operations in 2018-2021. The US is the 2nd largest major high-end TV market and Foxconn believes it can support what would eventually be the equivalent of 7.2m 65” TVs per year. The establishment of a streamlined production line covering the panel production to the system assembly should help improve manufacturing efficiency and make prompt responses to market demand, while also reducing transportation costs, according to Digitimes Research. The US investment plans would also help Foxconn transform itself from its current OEM business model into a conglomerate with system integration and brand management ability. While Foxconn is likely to win a US$3 billion tax break from the State of Wisconsin, the capital efficiency and optimization of the 10.5G plant in the US still shows a significant shortcomings compared to the 10.5G line currently being built by China-based BOE Technology, which was required to put up a mere 5% of capital needed for the construction and operation of the plant. Leveraging its advantages of being close to the US market and able to deliver goods promptly, Foxconn is expected to expand its investments in the US to include other products such as automotive panels, robots and other innovative products. Microsoft continues working on the Surface Phone, and it is rumored to have unique features including a foldable display. Maybe the new format is being facilitated by an alliance between Samsung and Microsoft with the recent announcement that Samsung’s QLED TV would be the official 4K display for use with the Xbox. Microsoft and Nokia were working on Lumia 1020 successor.