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December 11, 2012

Foxconn Plans to Expand in North America as Clients Seek 'Made in U.S.A.'

Foxconn Technology Group, based in Taipei and the major supplier to Hewlett-Packard (News - Alert) Co. and Apple Inc., now plans to expand its operations into North America, as more and more customers are requesting that their products be made in U.S.A.

"We are looking at doing more manufacturing in the U.S. because, in general, customers want more to be done there," said Louis Woo, a Foxconn spokesman, said in a phone interview. However, he declined to comment on specific plans or any of its clients.

According to Woo, Foxcomm employs about 1.6 million workers globally – including its factories in California and Texas that make partially-assembled products such as servers. "Supply chain is one of the big challenges for U.S. expansion," Woo said. “In addition, any manufacturing we take back to the U.S. needs to leverage high-value engineering talent there in comparison to the low-cost labor of China.”

Foxconn’s biggest client is Apple. Tim Cook, the chief executive officer of Apple, said in a Bloomberg (News - Alert) Businessweek’s recent interview that Apple plans on building Mac computers in the U.S by 2013.

The Foxconn chairman, Terry Gou, founded the maker of iPhones, iPads, PlayStations and televisions in Taipei 38 years ago. Gou understands the market sentiments, but wants to bring U.S. engineers to Asia to suitably train them in manufacturing before deploying them in its American companies back home, he said at a forum last month.

Suitably located at Taipei, Foxconn has been benefiting from having its suppliers located nearby. The delivery time is short, transport costs are reduced, and there is more flexibility in operations. Some of the parts of Apple’s phones, such as its core processors and glass used in displays, are manufactured in the U.S.

Earlier last month, Terry Gou spoke about the iPhone (News - Alert) 5 and claimed that Foxconn was not manufacturing iPhones as fast as Apple would like it to. The demand for iPhones had been skyrocketing and Taiwan's Foxconn Technology Group (News - Alert) said the company's flagship Hon Hai unit was having a hard time coping with it. Foxconn Chairman Terry Gou said, "It's not easy to make the iPhones. We are falling short of meeting the huge demand."

Apple’s Tim Cook didn’t outline where the manufacturing would happen or how much would be produced in the U.S. The operations would include more than just final assembly, was all that he implied.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Brooke Neuman

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