According to President Trump, Tim Cook has “eyes open” to United States-assembled iPhones and a new report from Nikkei reiterates that. According to the report, Apple is “mulling” a joint investment with Foxconn for a $7 billion automated display facility in the United States…
Amid rumors of plans to move to the United States, cut iPhone orders, and expansions to India, Foxconn today announced that it saw its first-ever annual sales decline in 2016 since it went public in 1991. The company’s decline is being blamed on “lukewarm” demand from Apple, its biggest client, according to Nikkei.
Foxconn appears to be taking full advantage of its acquisition of Sharp as the display maker is reported to be setting up an OLED production line at an iPhone assembly factory. All of the OLED production there is said to be destined for upcoming iPhone models, according to a Nikkei report cited by Digitimes.
Sharp plans to invest JPY100 billion (US$864 million) to set up an OLED production line at Foxconn Electronics’ factory in Zhengzhou City, northern China.
However, the facility won’t be ready for this year’s iPhones, as trial production is not expected to begin until 2018 or 2019 – though the company may be making OLED units for the iPhone 8 elsewhere …
Romantic images of bringing iPhone production back to the USA to create jobs were given a further blow today when Apple’s main iPhone assembler Foxconn announced that it has already deployed 40,000 robots on its production lines, and is working towards a goal of fully-automated factories.
Foxconn has already replaced more than half its workforce with robots since the launch of the iPhone 6, and the company’s Automation Technology Development Committee general manager Dai Jia-peng said that this was just the start of a three-phase plan …
David Barboza takes an in-depth and investigative look into the many moving pieces that have and continue to help Apple maintain the foothold it has in China to this day. Combing through confidential government records and a swath of interviews, Barboza explores the complexities technology companies like Apple have to go through to make manufacturing a success overseas. At the same time, the piece highlights the difficulties companies will encounter when attempting to bring manufacturing back to the U.S.
While Foxconn has expressed somewhat of an interest in potentially moving a portion of its operations to the United States, other supply chain manufactures that Apple relies on are reportedly less interested in making the jump. According to a report from Chinese publication qq, manufacturers are turned off by higher labor and operating costs in the United States.
According to a new report from Chinese news outlet the Economic Daily News, Apple is “aggressively” working to expand its presence in Southeast Asia. The company has been working with Foxconn on the efforts, the report explains, further strengthening the partnership between the two parties.
iPhone assembler Foxconn has confirmed that it is in preliminary discussions regarding expansion of its U.S. operations after a CNBC report showed a slide seemingly suggesting an investment of $7B and the creation of 50,000 new jobs within the USA.
The news report focused on Japanese company SoftBank pledging to invest $50B and create 50,000 jobs in the USA. However, a slide also showed a Foxconn logo on the right together with reference to an additional investment and extra jobs. The obvious inference is that the numbers on the right refer to Foxconn …
A worker on Foxconn’s iPhone production line (not involved in the theft)
A former senior manager at Foxconn has been charged with stealing and selling 5,700 iPhones for a total of around $1.5M, reports AsiaOne.
The Taiwanese manager, identified by his family name Tsai, worked in the testing department and instructed eight employees at Foxconn’s factory in the southern mainland Chinese city of Shenzhen to smuggle out about thousands of iPhone5 and iPhone5s, prosecutors said.
While you have to wonder what kind of security would allow thefts on such a massive scale to go initially undetected, the piece does contain one clue …
Foxconn workers outside the factory
Apple is said to be seeking more information on the deaths of two workers from Foxconn’s iPhone assembly line in Zhengzhou, China. The WSJ reports that one death was an apparent suicide, the other an accident.
iPhone assembler Foxconn has reported a 31% drop in its Q2 net profit, a hit being attributed to the recent decline in iPhone sales. The company reported net profits of NT$17.7B ($566) against analyst expectations of NT$23.9B, reports the WSJ.
There was some good news for the company, however, as its acquisition of Sharp got the government approval necessary to make the deal fully official.
The impact on suppliers of reduced iPhone demand was first seen back in May, when it was reported that Foxconn, Pegatron, Sharp, Japan Display and Sony had all seen their fortunes falling. The impact on one supplier in particular has worsened dramatically …
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A Digitimes report claims that Apple suppliers are facing pressure from Apple to reduce costs, with major players like Foxconn and Pegatron affected. Apple is in some cases adding suppliers into the mix to help drive down pricing. It was recently reported that Sharp was gearing up to compete with Samsung and LG for the OLED displays Apple is expected to use for future iPhones.
Currently, Largan is facing strong competition from Japan-based Kantatsu over camera module orders, while Foxconn and Pegatron are seeing Apple adding new ODM partners such as Wistron for the production of its new iPhone.
Taiwan’s printed circuit board (PCB) players are also competing aggressively over Apple’s orders by cutting prices.
A major British supplier has also just posted the largest loss in its history …
iPhone concept from ConceptsiPhone
With Apple expected to switch to OLED screens for future iPhones, it appears that it may not need to rely completely on the two major manufacturers for long. While Samsung and LG currently manufacture most of the world’s OLED screens between them, Nikkei reports that Sharp expects to be doing the same ‘before 2018’ …
The South China Morning Post reports that iPhone maker Foxconn has replaced more than half of its workforce with robots since the launch of the iPhone 6. The figures were provided by the local government in Kunshan, where the company is based.
“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labour costs,” said the department’s head Xu Yulian …
Sharp CEO Kozo Takahashi is stepping down (Photo: European Press Photo Agency)
Following the on-off-on-again acquisition of display-maker Sharp by Foxconn, the company has announced that 12 of the 13 board members – including CEO Kozo Takahashi – will step down once the takeover process is complete. The WSJ reports that the announcement follows deepening losses at the company.
Apple’s decline in iPhone sales is unsurprisingly having a knock-on effect on its key suppliers, with the WSJ reporting that Foxconn, Pegatron, Sharp, Japan Display and Sony have all reported falling profits or losses as a result.
According to a new report from The Economic Times of India, Apple supplier Foxconn is close to signing a deal with the Indian government to open an iPhone manufacturing plant in the country. The report claims that Apple and Foxconn have narrowed the location for the factory down to Maharashtra.
Over the weekend, Bloomberg posted an exclusive report of Pegatron’s iPhone plant in China. Although Foxconn is Apple’s primary assembler, Apple has moved more of its iPhone assembly contracts to Pegatron in recent years to diversify its supply chain.
The Bloomberg report describes how the factory is managing its workforce, tracking hours via automated systems, and tackling labor issues like overtime. This is the first time Pegatron has allowed official press to photograph the insides of the factory, where 50,000 people work on the floor.
It had always seemed obvious that Foxconn’s reason for buying display-maker Sharp was to acquire the capacity to make OLED displays for future iPhones – and a supply-chain report today supports this.
Sharp will set up one 4.5G and two 6G AMOLED production lines with monthly capacity of 13,000, 11,500 and 34,500 glass substrates respectively, with total monthly capacity of 9.85 million 5.5-inch equivalent panels.
While the source is Digitimes, this one seems likely to be at least broadly accurate.
Apple currently used OLED displays only in the Apple Watch, still relying on older LCD displays for the iPhone, but numerous reports suggest that the company plans to switch to OLED screens for iPhones at some point in 2017 or 2018.
Image: OLED display under microscope via Reddit
Foxconn’s acquisition of Japanese display-maker Sharp looks likely to help Apple reduce its dependence on Samsung as it prepares for a transition from LCD to OLED displays.
The WSJ notes that Samsung currently makes 95% of the world’s OLED displays, and that Apple always aims to have multiple sources of components to reduce risk and strengthen its negotiating position.
While Sharp doesn’t currently make OLED screens, it will almost certainly start doing so under Foxconn’s ownership.
Sharp can springboard off its existing technology to develop the screens, says Alberto Moel, a technology analyst for Bernstein Research. The two types use the same backbone, but OLED screens are topped with a layer of organic compounds instead of the liquid crystal layer for LCDs. “The first part of the production process is similar,” he said.
Foxconn has long been seeking to expand its role in iPhone production from low-margin assembly work into the more profitable component business.
Apple currently used OLED displays only in the Apple Watch, but is widely expected to switch to the newer display technology in the iPhone in either 2017 or 2018. While Samsung looks set to be Apple’s lead supplier, that’s something the iPhone maker will want to change over time.
Deja vu? The Foxconn acquisition of Sharp was almost a done deal a few weeks ago, until Sharp revealed some additional liabilities at the eleventh hour it had not previously disclosed. This meant Foxconn had to go back to the drawing board and re-assess the deal, renegotiating some parts of the contract with Sharp. The initial offer was worth $6.2 billion. Today, the companies announced Foxconn will buy Sharp in a $3.5 billion dollar deal.
It looks like the on-off acquisition of display-maker Sharp by iPhone assembler Foxconn is back on. The WSJ reported earlier that the two companies have been discussing a significantly lower valuation for the company, and Reuters now reports that share trading in Foxconn has been suspended due to a “major announcement.”
Japan’s Sharp Corp and Taiwan’s Foxconn are set to sign a merger deal this week after repeated delays, with the two sides set to agree on a smaller bailout than originally planned for the troubled Japanese electronics maker, two sources familiar with the talks said.
The deal is expected to be finalised during board meetings by both companies tomorrow for around $2B less than originally discussed, after a rather stormy journey.
The Nikkei Asian Review reports the latest on the on-off-maybe acquisition of display maker Sharp by iPhone assembler Foxconn.
Various potential deals appear to be under discussion with both Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ. These include paying the banks less for the shares they hold, reducing the interest rate payable on a joint loan to Sharp and agreeing that the banks will provide financial support in the event that the feared liabilities do indeed materialize after the deal is done.
It was initially reported last month that the deal had been done before details of potential Sharp liabilities put it into doubt. Negotiations then resumed.
It had been suggested at one stage that Apple may help to support the deal, but as there has been no recent mention of this, we’d say this currently seems unlikely. Foxconn has, however, long played a role in helping keep Sharp afloat.
Foxconn’s planned takeover of Sharp, to allow it to begin making displays for iPhones as well as assembling them, is reportedly back on track.
First reports of Foxconn’s interest in purchasing Sharp’s display division emerged last September, when it was reported that Apple would come on board as an investor. Foxconn made a $5.3B bid in January, and it was initially reported that the deal had been concluded last week.