Foxconn details construction plans for next 18 months

LCD fab not included on list of projects

A model of the Foxconn complex, called the Wisconn Valley Science and Technology Park, in Mount Pleasant.

Last updated on July 2nd, 2019 at 09:11 pm

Foxconn Technology Group responded to reports it had abandoned plans for a factory in Wisconsin by detailing its construction plans for the next 18 months.

Those plans include a liquid crystal module backend packaging plant, a high-precision molding factory, a system integration assembly facility, centers for rapid prototyping, research and development and data, and a town center.

Missing from that list is a thin-film-transistor LCD fabrication facility or “fab.” When Foxconn originally announced plans for a $10 billion campus in Wisconsin, the company said it would build a Gen 10.5 LCD fab so it could produce the largest display screens in the world. Plans shifted last year to a Gen 6 plant that would produce smaller screens and provide additional flexibility.

In a statement Wednesday, the company said its “need to be responsive to the global market environment has necessitated a reconsideration of which TFT technology will best suit the needs of our customers.”

News of Foxconn’s changing plans emerged Wednesday in a Reuters report that drew on an interview with Louis Woo, special assistant to Foxconn chairman Terry Gou. Woo said the company would be focusing on creating a technology hub and was quoted as saying the company would not be building a factory in the state.

Foxconn executives, including Woo, have previously said the project is less about a single factory and more about creating an 8K+5G ecosystem, a reference to the next generation of screen resolution and cellular technology.

A Nikkei Asian Review story on Thursday also suggested Foxconn was halting the Wisconsin project “for further and evaluation and discussion with the new governor.” Citing three unnamed sources, Nikkei report that Gov. Tony Evers approached the company “to renegotiate some of the side deals his predecessor made with the company.” The story does not say what deals were included in the talks. Foxconn has a contract with the state for $3 billion in incentives and a local development agreement for $911 million in support.

Evers’ office did not immediately respond to requests for comment.

Foxconn disputed elements of the Nikkei story, issuing a statement reiterating its commitment to create 13,000 jobs in Wisconsin.

“All interactions to date with Governor Evers and his team have been constructive and we look forward to further discussions as we continue to invest in American talent and broaden the base of our investment within the State of Wisconsin,” the statement said.

The company’s plans, however, have been evolving. Beyond the changes in LCD fab plans, the company’s initial operations have changed.

When the project was initially announced, supporters and local officials said Foxconn would establish an assembly facility with 3,000 jobs. Emails released by the state later showed Rockwell Automation’s Milwaukee headquarters was considered as a potential location. Foxconn ultimately leased a 156,000-square-foot facility in Mount Pleasant for assembly operations.

After Foxconn signed a development agreement with Mount Pleasant and Racine County, local officials said the company planned to move ahead with a more than 1.5 million-square-foot assembly operation at the Mount Pleasant site.

That building is yet to become a reality. Instead, construction crews spent 2018 preparing the nearly 800-acre site for development. A 120,000-square-foot multi-purpose building was completed last year along with a 3 million-square-foot building pad that construction officials had said would be for the first fab facility.

It now appears the company will instead move forward with its advanced manufacturing facilities in Mount Pleasant.

Plans for an LCD fabrication facility have been complicated by changing market forces. Fears of a slowing global economy have increased in recent months and prices for 65-inch display panels coming out of a fab have fallen from $408 to $223 since the company chose Wisconsin, according to Bob O’Brien, partner of Display Supply Chain Consultants.

Foxconn says it has chosen to broaden the base of its investment in Wisconsin to ensure the project is successful over the long-term. The company is creating a venture capital fund with several Milwaukee-area companies, making a $100 million gift to the University of Wisconsin-Madison and establishing innovation centers in Green Bay, Eau Claire and Racine.

But the Foxconn development also fell short of projections in its first year. To receive any tax incentives for 2018 investments, the company needed to create at least 260 jobs and needed 1,040 to receive the full $9.5 available under its contract with the state. Foxconn notified the state in January only 178 jobs it created would qualify for credits.

[This story has been updated with information regarding the Nikkei Asian Review report]

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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