Foxconn LCD Panel Plant Could Bring TV Manufacturing Back To The U.S.
President Donald Trump and Terry Gou, chairman of Taiwan-based Foxconn Electronics (Hon Hai Precision Industry), celebrated plans Wednesday for Foxconn to invest $10 billion over four years to build a “state of the art” LCD panel manufacturing plant in southeastern Wisconsin.
While touting the potential boost the move will bring to the local and national economies, Trump boasted of his personal contributions in getting the decision made. Gou, meanwhile, hinted that the aim of the venture is to lay the foundation for building a “5K+8K ecosystem” in the United States with LCD panels playing a role in products ranging from smart TVs to high-resolution mobile devices.
Gou said the initial expectations are for the plant to generate a minimum of 3,000 jobs, with the potential for up to 13,000 new employment opportunities down the road. The plant, which will be operated by Sharp, a Japanese-based electronics manufacturing unit under the control of Gou’s Foxconn, will reportedly receive $3 billion in tax breaks from the state of Wisconsin over the next 15 years.
Trump also celebrated the move’s historic implications as the return of LCD and electronic technologies manufacturing to the U.S, a fact that was confirmed for us by the Consumer Technology Association (CTA).
“Our research finds few if any LCD screens are manufactured in the U.S. at this time,” Gary Shapiro, CTA president and CEO, told HD Guru.
Trump said the initial plans include two facilities, an initial plant in southeastern Wisconsin and a much larger facility that will be constructed in the next few years and will be “about the biggest there is anywhere.”
Trump added that the announcement: “signifies the start of a series of investments by Foxconn in American manufacturing in the coming years.”
Shapiro wouldn’t speculate on whether the startup of a U.S.-based LCD panel factory might lead to the establishment of final assembly factories for LCD TVs in the United States, adding: “it is far too soon to tell. Individual manufacturers make decisions about where to locate assembly plants and other production facilities based on a wide variety of factors.”
Read more on the Sharp/Foxconn LCD panel plant after the jump:
Exactly what Foxconn plans to do with the panels it builds and who its potential customers could be was not revealed.
Paul Gagnon, director of TV sets technology research for media and telecom analysis firm IHS Markit, told us that “at this point, I would expect that Foxconn plans to co-locate a TV assembly factory on site, at least in the longer term. However initially, it might have to send panels to Mexico for assembly until such an assembly factory is built in the U.S. Logistically, it might be a bit tough to have the assembly factory so far from the fab, especially given the harsh winters in Wisconsin that might make transport a challenge at times.”
The Wisconsin campus, which reportedly will be located in the district of House Speaker Paul Ryan, will be “large enough to contain several factories, though a Gen 10.5 [plant] seems to be the most likely one at this point,” Gagnon predicted.
In announcing the plan, Gou said he wanted to establish an LCD panel plant in the U.S. because there is not a single LCD fab in the U.S. for the buildup of a complete 8K ecosystem.
He said 8K display technology, 5G transmission, Big Data and artificial intelligence (AI) are all new technologies poised to make up this new “5G+8K” realm. LCD panels produced in the planned Wisconsin plant reportedly could be used for next-generation TVs, autonomous driving vehicles, aviation systems, education, healthcare and advanced manufacturing.
Gagnon told us, “8K has applications in specialty display fields, such as medical, but also large TV applications at 65 inches and larger sizes. A Gen 10.5 LCD fab is well suited for such sizes.”
Meanwhile, the CTA’s Shapiro agreed that “5G holds great promise for the development of new technologies and potential new industries. 5G networks will be up to 100x faster, 5x more responsive than today’s networks providing needed extra bandwidth for today’s – and tomorrow’s – hyper-connected world.
“Specifically, 5G can lead to exciting developments in telemedicine, smart cities, self-driving cars, industrial automation and more,” Shapiro told us. “At a recent FCC hearing on 5G, FCC General Counsel Brendan Carr noted the Commission has seen estimates the U.S. will see $275 billion in investment over the next decade to deploy 5G, that may produce 3 million more jobs. He added, when you combine 5G deployment with IoT, you are looking at a potential trillion dollar boost to the economy.”
As for the CTA’s hope for future growth and business development in the U.S. consumer technology space, Shapiro said: “We continue to work with the administration and Congress in pursuit of a `pro-innovation’ policy agenda that will create jobs, drive overall economic growth and maintain our nation’s global leadership in innovation. We are excited about the Administration’s interest in and focus on self-driving cars, robotics, innovation in healthcare and the Internet of things.
“But for the U.S. to maintain its leadership in the world in innovation we need to focus on fundamental policies that make a difference,” Shapiro continued. “This includes corporate tax reform, patent litigation reform, and a comprehensive approach to immigration policy that attracts and encourages the best and brightest to stay and create companies here in the U.S. This also means not attacking but defending the biggest tech companies that are driving our economy and global leadership and challenging Europe on their selective actions against US tech companies based on the EU’s random enforcement actions against American innovative companies using ambiguous antitrust laws.
“We also need smart trade policies that protect American interests while opening foreign markets. Consumer technology is a global industry with a global supply chain. The return of LCD manufacturing to the U.S. is fantastic but will not achieve its full potential if the movement of components and finished goods in and out of the U.S. is impeded by high tariffs and trade barriers.”
Gou has made no secret of the fact that he wants to get the manufacturing and marketing rights to the Sharp brand back from rival Hisense, after taking control of Sharp, a Japanese consumer electronics giant with great LCD expertise, two years ago.
The original management had licensed the rights to the Sharp and Aquos brands for TVs and related electronics components to Hisense for five years in a bid to save Sharp from its crashing debt load, prior to Terry Gou and Foxconn stepping in and purchasing controlling interest in the company.
Rebuffed by Hisense in repeated attempts to buy back the brand, Gou has cut off supplies of LCD panels to the Chinese TV maker from Sharp and Foxconn-operated LCD panel factories, and has filed a lawsuit against Hisense for alleged poor stewardship of the Sharp brand and building products under the Sharp name that the complaint said are “shoddily made.”
Hisense has vehemently denied the charges and vows to fight the complaint and accusations made against its products and manufacturing practices.
Gagnon told us, “I do believe that as soon as Sharp can get the rights back to the Sharp brand, they will launch an aggressive U.S. push backed by this investment.”
By Greg Tarr
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