Apple manufacturing partner looks to build factory in the US

Sunday, 26 Jan 2014 | 8:32 PM ET

Taiwan's Hon Hai Precision Industry, the main manufacturer of Apple products and a symbol of U.S. outsourcing, is reportedly weighing a plan to build an advanced display manufacturing facility in its largest market.

At the company's 40th anniversary celebration on Sunday, Chairman Terry Guo said he is looking to relocate capital-intensive and high-tech manufacturing to the U.S., the Wall Street Journal reported.

(Read more: Foxconn saves the day for BlackBerry; stock spikes)

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"Automation, software and technology innovation will be our key focus in the U.S. in the coming few years," Gou said, according to the WSJ.

Hon Hai, which is better known by the trade name Foxconn, draws an estimated 40-50 percent of its revenue from assembling gadgets and other work for Apple.

The company is assessing the feasibility of building an advanced 10th-generation panel manufacturing plant in the U.S., Gou said. Such a facility could produce liquid display screens larger than 60 inches. He said it is currently difficult to ship large TV screens to the U.S from Asia.

(Read more: China's Foxconn looks for life beyond iPhone)

As revenue from its low-margin contract manufacturing business slows, Hon Hai has been diversifying into other areas including software development and telecom services.

In November, the Taiwanese electronics giant said it might invest $40 million in the U.S. state of Pennsylvania to build a high-tech manufacturing facility for goods such as components for telecommunications equipment and internet servers and jointly develop robotics with Carnegie Mellon University.

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Hon Hai, which is facing surging labor costs in its Chinese factories, has diversified its production base across more than 10 countries, including Vietnam, Turkey, Brazil, Mexico and Hungary, according to WSJ.

And Guo said the company also plans to make Indonesia a key production site in the coming years.

(Read more: Your software is going to get smarter)

In December, Foxconn and BlackBerry entered a deal to design and market phones in Indonesia. Before setting up a factory in Indonesia, Foxconn will make BlackBerry phones at its Chinese factories.

Earlier this month, the governor of Indonesia's capital said he is willing to provide up to 200 hectares (494 acres) of land to the company to build a factory there as part of efforts to attract more high-tech investments.

—By CNBC's Ansuya Harjani. Follow her on Twitter @Ansuya_H

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