Questions remain over whether Foxconn will actually open a factory in Racine County — and if so, what the Taiwanese manufacturing giant would produce there. That's according to a Wednesday story in the Milwaukee Journal Sentinel.
Foxconn continues to promise up to 13,000 jobs at the site. But in less than two years, the company has scaled back the size of the LCD screens to be produced at the plant. And earlier this year, a high-ranking official hinted Foxconn might focus on research and development instead of production. Within days, Foxconn again said it was committed to manufacturing, after all.
The company's plans are of concern to many people in Wisconsin, including because Foxconn stands to get an unprecedented incentives package — $4 billion in state and local subsidies if they follow through with the promised jobs.
For the Journal Sentinel article, reporter John Schmid found only industry analysts with strong enough credentials to weigh in. Since the flat panel industry is based in Asia, Schmid spoke to those well versed in that market.
Schmid says the most striking comments were from Yasuo Nakane, an analyst based in Tokyo Japan at Mizuho Securities Co.
“He said he cannot make business sense of what Foxconn — which thrives from a manufacturing base in China, it is known for made in China — [is] doing offering to build a production site in the farm fields of southeastern Wisconsin,” Schmid says.
Nakane believes there’s only a 10 percent chance that Foxconn will actually open a Generation 6 manufacturing facility in Wisconsin, Schmid says. A second analyst put the odds at 50-50.
Schmid says that during his research there was one more thing he was surprised to learn.
“What Wisconsin is looking at is glass based screens. Interestingly, in the two years since Wisconsin started toying with the idea of Wisconsin getting into the flat panel business, this very fast changing dynamic consumer electronics industry has already moved beyond glass. We’re talking about what’s called flexible and rollable non-glass screens. And we’re talking about rollable tvs and foldable phones.”
But Schmid says to really understand what’s going on in the market and why the Wisconsin plant is in such flux, you have to look at what’s happening in the flat panel market. This industry in Asia, he says, is already over producing.
“There are too many screens, prices are already falling. And the upshot of that, of course, if prices are falling, if there’s already an oversupply, why are you adding one more facility on the other side of the world that doesn’t have a ring of suppliers around it, that’s transplanted from Asia into the farm fields of Wisconsin and doing so at a higher cost?” he says.