Hon Hai Precision Industry Co., the world’s largest contract manufacturer for consumer electronics, has announced it will invest ¥37.5 billion (US$5.74 billion) to expand its facilities in Nanjing, turning it into the largest smartphone assembly on the planet and a hub for research and development.
Hon Hai, better known as Foxconn, is the world’s biggest contract electronics maker and a major Apple supplier, providing parts for the iPhone as well as other notable products such as BlackBerry, Kindle, Nintendo 3DS, Nokia, PlayStation 3, PlayStation 4, Nintendo Switch, Xbox One and many other consumer electronics.
The Taiwan-based Foxconn Technology Group said its deputy general manager Zheng Naijian signed a contract on 12 September with Nanjing’s deputy mayor, Liu Yi’an, in the city. The two parties reached a general agreement with the Jiangsu provincial capital that also includes possible investments such as a liquid crystal display TV plant, a research and development site, chip-making facilities and a logistics centre. Nanjing may provide financial support as well as help with land and other infrastructure.
According to the South China Morning Post, Foxconn’s smartphone hub will be engaged in the research and development of the back-end modules for mobile devices. A separate part of the facility will conduct research into Fifth-Generation telecommunications (5G) standards, which theoretically can transmit and receive data 20 times faster than current 4G phones. The LCD portion of the hub will become a centre for developing and producing large-format high-definition televisions, according to the company.
In addition, they stated that nowhere are the company’s fortunes more intricately tied than in China, where up to 2.33 billion mobile phones are in circulation in the world’s most populous nation, according to an estimate by the Internet Society of China. Thus, the business of producing smartphones for this market is particularly vital for Foxconn, whose clients include not merely Apple but also its direct competitors Huawei and Xiaomi.
The Nikkei Asian Review wrote that Nanjing already is home to some smartphone manufacturing facilities, but on a small scale. Foxconn mass-produces iPhones for Apple in locations such as Henan Province’s Zhengzhou, but appears to be expanding its production network in order to capture business from a broad range of soaring Chinese smartphone makers.
They also stated that since the 1980s, Foxconn has built a number of massive factories in mainland China, growing to become the region’s biggest employer, with a payroll of approximately 1 million employees, making it the largest private job creator in China. In February, Foxconn embarked on building display plant in Guangzhou with an investment of approximately US$9 billion.
