Foxconn in talks to boost manufacturing in United States

Foxconn is in talks with officials from a number of U.S. states to acquire support to build new factories in the country.

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Credit: Apple

Foxconn, also known as Hon Hai Precision Industry, is negotiating with representatives of U.S. states to gather support for the construction of manufacturing centers closer to its clients.

As Foxconn, the maker of Apple's iPhone, looks to expand its manufacturing capabilities and preferably set up shop closer to the U.S. client base, representatives from Arizona, Colorado, Texas, New York, New Jersey and Louisiana have all made contact with the firm or met with Foxconn founder Terry Gou. According to Bloomberg, additional states have potentially also tried to secure plants within their jurisdictions.

The new plants will specialize in making tools, molds and connectors rather than smartphone assembly. According to Gou, "knowledge and content-based skills" rather than labor-intensive manufacturing will be key to U.S. plants -- perhaps due to the difference in minimum wages and conditions expected by factory workers in the U.S. in comparison to areas such as China.

If smartphone assembly and tablet construction was removed to the U.S., this would increase the labor costs of supply -- but as a labor shortage looms in China, the company appears to be converting staff from line workers to engineers, while using robotics for basic production.

Simon Hsing, a spokesman for the Taipei-based firm, said that purchase commitments and customer support for products built in the U.S. rather than outsourced to Asia would be key in the creation of the plants. If built in the U.S., the factories could not only boost the U.S. economy by providing local jobs, but would also improve the efficiency of supply chains due to proximity to other parters, including Applied Materials -- a provider of semiconductor, flat panel and solar products.

Recently, Foxconn's Interconnect Technology unit announced an expansion of its Pennsylvania center -- where computer and smartphone connectors are manufactured -- through a $30 million cash injection. The expansion will create 500 jobs over the next two years, according to the firm. Additionally, Foxconn said it would invest $10 million in projects with Pittsburgh-based Carnegie Mellon University in the research and development of robotics and advanced manufacturing.

Foxconn assembles Apple's iPhone, and also holds contracts in the making of game consoles for Microsoft and computers for Amazon, Dell and Hewlett-Packard.