Glass plant not a ‘necessity’ with Foxconn making smaller screens

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The first LCD fabrication facility on the Foxconn Technology Group campus in Mount Pleasant will be a Gen 6 plant, not a Gen 10.5 plant as originally planned. The change gives Foxconn more flexibility in deciding which products to produce in Wisconsin but also removes the need for a Corning glass plant to co-locate at the site, Louis Woo, special assistant to Foxconn chairman Terry Gou, said in an interview this week.

Attendees visit the Foxconn lounge at the MMAC all-member meeting

Woo stressed the company is not changing its plans to create 13,000 jobs and invest $10 billion in Wisconsin.

“Those have not changed. We would never change that,” he said. “That’s our commitment to the government, that’s our commitment to the state of Wisconsin. It’s just the nature of the technology, what kind of technology we are bringing in, what kind of product we will produce, that will continue to change.”

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Woo said the change in plans is about producing a wider variety of screen sizes and is still the latest technology. A Gen 6 plant would allow Foxconn to produce screens for items ranging from a notebook computer to a central display in an autonomous vehicle to an 80- or 90-inch television.

“The Gen 6 would give us a lot of versatility,” Woo said.

He said a rapidly-evolving high tech industry and shifting supply and demand characteristics drive the change in plans. Building the first thin-film-transistor or TFT-Fab in the U.S. will give the company the opportunity to explore new display technologies or other semiconductor processing technology on glass.

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“We are very excited about our current choices,” Woo said.

Opting for a Gen 6 plant will also eliminate one potential roadblock to establishing operations. A Gen 10.5 plant would require a glass plant to be co-located on the Mount Pleasant site. New York-based Corning Inc. was expected to build a $1 billion facility, but Wendell Weeks, Corning chairman, CEO and president, said on the company’s most recent earnings call any new plant would require two of every three dollars to come from another source. Wisconsin officials have said they will not offer additional incentives to support the Foxconn project. The state is already providing an incentive package of about $3 billion and local incentives and infrastructure improvement costs for the Foxconn project total another $1.5 billion.

Woo said a glass plant “would no longer be a necessity” with a Gen 6 plant.

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“We can just ship (glass) from somewhere else, could be from Kentucky or somewhere,” he said. “That would be still palatable because the pieces of glass that would be required would be a lot smaller.”

Corning currently has a glass plant located in Kentucky.

Bob O’Brien, a partner at Display Supply Chain Consultants, told BizTimes in May a Gen 6 plant produces roughly 5 foot by 6 foot panels while a Gen 10.5 plant produces 10 foot by 11 foot panels. He also said a $10 billion investment makes sense for a Gen 10.5 plant, but a Gen 6 plant would require a $2 billion to $3 billion investment.

The second phase of what Foxconn calls the Wisconn Valley Science and Technology Park could include a Gen 10.5 plant, Woo said, and adding a glass plant would likely be a necessity at that point.

Louis Woo, special assistant to Foxconn chairman Terry Gou, visits a recruiting event at Marquette.

Woo’s comments confirm elements of a Nikkei Asian Review story from May that said Foxconn would turn to producing smaller screens from its Wisconsin plant. At the time, Foxconn called the report inaccurate and said it was committed to its job and capital investment targets. The company’s statements did leave open the possibility of a shifting product mix and a phased approach to developing the campus.

Even with the shift in plans, hiring is underway at the company’s operations in Milwaukee and Mount Pleasant. Foxconn currently has around 100 employees in Wisconsin between the two locations, according to Chris Murdoch, Foxconn senior advisor and the company’s first employee in the state.

After purchasing the 611 Building at 617 E. Wisconsin Ave. in downtown Milwaukee from Northwestern Mutual, Foxconn announced last week it would make the building its North American headquarters and plan to employ 500 employees at the site. The company also has a leased facility in Mount Pleasant where it is experimenting with production methods.

“I think you’ll see over the next several months the hiring will start to ramp up,” Murdoch said. “(In) our agreement with the state of Wisconsin there are certain goals for hiring and people employed as part of the project, so we’ll be looking to meet those goals.”

Foxconn’s contract with the state requires the company to have at least 260 full-time employees at the end of the year to receive any tax credits and 1,040 to receive the maximum $9.5 million in credits available this year. The actual credits the company will receive are equal to 17 percent of its qualifying payroll for the year.

“If we have a goal to achieve, to us it doesn’t matter whether it’s realistic or not,” Woo said when asked if the company could still reach the upper end of its hiring target for the year. “It’s the goal that we signed on so we will certainly do our best to make it happen.”

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