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Foxconn Electronics (Hon Hai Precision Industry) chairman Terry Guo has indicated that the company is considering establishing a display panel factory in the US through cooperation with Sharp, which is expected to provide advanced panel technology. However, the feasibility of the project will hinge on land costs for land, water supply and power supply, Guo noted.
Apart from such costs, there are other difficulties Foxconn will face, adding uncertainty to the project.
As panel makers are mostly located in South Korea, China, Taiwan and Japan, their upstream suppliers, including makers of glass substrates, polarizers, backlight modules and materials, form clusters in Asia. In order to set up a panel factory in the US, Foxconn may have to invite suppliers to set up factories there. But how many of them will be willing to do so, as far as cost and competitiveness are concerned?
For glass substrates in particular, since transportation of large-size glass substrates is very costly and it is necessary to supply the material nearby. US-based Corning, with factories in the US primarily for R&D of technology and new products, has almost all of its plants for volume production located in Asia. Thus, Foxconn’s establishment of a panel factory in the US will need support from Corning or other glass suppliers who produce large-size glass substrates in the vicinity.
Foxconn will cooperate with Sharp to set up a 10.5G line in Guangzhou, southern China, and one of the main incentives is strong financial support from the local government. Is it possible for the US local governments to offer subsidies for Foxconn’s panel factory?
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