Foxconn Looking to Build $5.7 Billion iPhone Display Factory to Win Apple Orders

Apple's main assembly partner for iOS devices, Foxconn, is looking to increase its presence in Apple's supply chain as it considers constructing a new plant to provide displays for the popular devices, according to The Wall Street Journal. Total investment in the project could reach $5.7 billion.
Foxconn, formally known as Hon Hai Precision Industry Co. , is discussing a possible investment with the government of Zhengzhou, about 750 kilometers south of Beijing, according to people familiar with the talks. The two sides are discussing terms such as how to divide the investment, which could reach as much as 35 billion yuan ($5.7 billion), the people said.
iphone_6_cost_breakdown_wsj
The display is typically the most expensive single component in Apple's iOS devices, and the company has long sourced the parts from a variety of vendors including Samsung, LG Display, Sharp, and Japan Display. Foxconn has been seeking to improve its display expertise in recent years, pursuing a troubled partnership with Sharp as it has tried to position itself to win orders for iPhone and iPad displays.

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46 months ago
I hear there is some available factory space in Mesa Arizona.
Rating: 11 Votes
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46 months ago

That labor cost seems low but that is one sweet mark - up for the final price.


Don't forget that there are other costs to take into account, the image just shows cost of materials and labour. It doesn't factor in R&D, distribution, marketing, warranty costs, etc. You may as well double the BOM cost to get a more accurate cost before taking into account the actual profit margin.
Rating: 5 Votes
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46 months ago
I'm still amazed at the huge profit margins with these phones. :eek:
Rating: 3 Votes
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46 months ago
just wish apple stop or decrease dealing with China....
Rating: 3 Votes
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46 months ago
I wonder if they'd be interested in buying some second-hand sapphire furnaces??
Rating: 2 Votes
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46 months ago

Why? That is a racist remark unless you have some substantial reasoning on why Apple shouldn't be making a load of money. Maybe the US should stop dealing with China too and become a weaker and poorer nation?


? How is that a racist remark? The US became a weaker economy because of outsourcing!
Rating: 1 Votes
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46 months ago
Now we'll get even MORE parts leaks!
Rating: 1 Votes
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46 months ago
Foxconn Looking to Build $5.7 Billion iPhone Display Factory to Win Apple Orders

I understand your statement that the US has "largely forgotten" - But disagree with those specific words - We as consumers and manufacturers in the US have less "forgot how to manufacture" and more been taken by the Extreme difference in labor costs between USA and "Far East" - includes China, Malaysia, and the other emerging economies that are even undercutting China and Japan. Much to their chagrin, China/Japan are losing market share as they are enjoying the extra money from what they were making 30 or 40 years ago, and their economies are seeing inflation take effect.

The US still has some manufacturing in the USA, just way more expensive than what the worldwide market can supply. We as consumers need to vote with our pocket books, and give more support to those companies that utilize American products more in their devices, rather than demanding cheaper prices for the products.



Oh, Im there with you. And I didnt mean to suggest that a price difference between the two markets was not the root cause. But the same price difference also exists between China and Germany and their manufacturing sector is more vibrant than ever. So whatever choices they made are different than whatever choices we made. And in my mind, the difference between them constitutes a choice on our part. So this was not entirely out of our control.

BTW, I believe manufacturing to be fundamental to every economy and that ours is weaker without it. To that end, I work to have most things in my own store, made in the US:

http://www.oveready.com

http://www.oveready.com/usa-manufacturing/info_8.html

I loose business to price advantaged competitors on a regular basis but also make certain those who pay more, get more. I would happily pay an extra $100 for a US made Mac or i device, given the choice.
Rating: 1 Votes
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46 months ago

I wonder how many iPhones a person can make in a day at $4-4.50 a unit. Seems low, but if they make 700 phones a day...that's ~$3000 a day. now how much of that is employee income?


You really think one can assemble, test, and pack an iPhone in less than a minute?
Rating: 1 Votes
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46 months ago

That labor cost seems low but that is one sweet mark - up for the final price.


Not just the R&D and other things that go into the product, but also the services that come with it.

Such as iCloud, Siri, Maps, Genius Bar and many more. With Android, Google provides these with revenue coming from "selling" you to advertisers. But Apple has to pay for these from up-front revenue.

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And Americans did nothing about it. They refused to work at lower wages and let this happen.


There was nothing that they could do about it. Do remember that the cost structure of living in the U.S. is nothing like that of India or China. The minimum wage in the U.S. is a lot more than the numbers quoted above, and yet it still is inadequate in almost all of the country. Someone working full-time (40 hours x 50 weeks = 2000 hours) only makes $14,500 per year. That's below the poverty line.
Rating: 1 Votes
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