Electronics manufacturer Foxconn Technology Group, manufacturer of Apple Inc.'s iPhone and other products, confirmed reports on Wednesday, Dec. 7, that it is currently discussing plans to expand in the U.S. a day after Japan's SoftBank Group Corp. made its promise to invest in the U.S.
The Wall Street Journal said that Foxconn did not give details on the size and scope of its U.S. investment.
"We can confirm that we are in preliminary discussions regarding a potential investment that would represent an expansion of our current U.S. operations," the company formally known as Hon Hai Precision Industry Co. said.
Foxconn did not specify which sector it is planning for its U.S. investments, but the company has been known to engage in high-tech sectors such as e-commerce, robotics, consumer tech startups and healthcare. The company's main business is electronics assembly with Apple as its biggest client.
A day before Foxconn made this announcement, SoftBank Group Corp. chief executive Masayoshi Son and President-elect Donald Trump met in New York, where Son pledged to invest $50 billion in the U.S. While speaking to the media, Son held a piece of paper with Foxconn's logo beside SoftBank's.
Son and Foxconn chairman Terry Gou are longtime friends. Both their companies - SoftBank and Foxconn - have collaborated on several investments, which include on a joint venture with Alibaba Group Holding Ltd. to sell SoftBank's humanoid robot, Pepper.
President-elect Donald Trump has earlier said that he will work for a return of manufacturing to the U.S. but industry analysts said it is unlikely that Foxconn will bring iPhone production back but it could move some of its manufacturing business to the U.S. However, the U.S. has higher labor costs and it does not have the integrated supply chain that they have developed in China.
The International Business Times reported that Gou expressed concern on the increase in production costs. Currently, it costs Apple an estimated $225 to make its latest 32GB iPhone 7, while the devices are sold for $649.
"Making iPhones in the U.S. means the cost will more than double," the source was quoted as saying.