Taiwanese electronics manufacturer Hon Hai Precision (aka Foxconn) will open a LCD panel factory in the U.S. in Wisconsin, Reuters reports. The $10 billion plant will take four years to be completed, and receive tax incentives of $3 billion over 20 years. The move is not a big surprise with CEO Terry Gou having discussed a display panel factory in January.
Panjiva data shows U.S. imports of display panels increased 8.0% on a year earlier in the second quarter. That was led by a 19.6% rise in shipments from China, which has displaced imports from South Korea (30.2% lower) and Japan (which slumped by 70.2%).
Foxconn’s subsidiaries accounted for 11.4% of imports, lagging Qisda’s 17.8% which made it the number one exporter by volumes.
Global exports by Chinese manufacturers have grown more quickly. Shipments increased 9.4% in the past quarter, though they were held back by sales to EU countries which had slowed to a growth of just 2.7% in the three months to May 31.
Over the longer-term Chinese manufacturers have outpaced their regional competitors in a market segment that has stagnated. Exports in the 12 months to June 30 were unchanged on three years earlier on a compound growth basis. By contrast exports from South Korea fell 8.0% over the same period, Panjiva analysis of official data shows.
If the market is stagnating – at least in value terms – a move to be closer-to-market may improve profits via efficiency gains, particularly as mechanization of production increases. The long lead-time on the new factory’s opening means a significant impact on Chinese exports will likely be limited in the coming year though.