Foxconn to Manufacture LCD TV Sets in Chongqing
China Business News, 10/26/12
The Chongqing municipal government and Taiwanese electronics manufacturer Foxconn (2038.HK; 2354.TW) held a signing ceremony on October 25 to mark an agreement on a Chongqing-based project covering smart TV module assembly and finished-goods R&D and manufacturing. Foxconn will invest in Chongqing-based production of LCD TV modules and LCD televisions that will yield an annual total of 3 mln units for sales revenues of more than RMB 12 bln per year. 1.5 mln of the 3 mln units produced per year will be HD touchscreen televisions for export to European markets.
Foxconn president Terry Gou said his company had selected Chongqing on the basis of the municipal government's support: the mayor of Chongqing had actively sought out projects in which to invest, and arranged for the project review workflow to be greatly streamlined. In addition, Gou said, the municipality provides government-subsidized rental housing and Chongqing residence permits (hukou) for employees. On September 29, 2009, Foxconn, HP, and the Chongqing government signed an agreement to produce a total of 20 mln notebook computers per year within the municipality.
At the signing ceremony event on October 25, it was not immediately clear where Foxconn would source its LCD panels for TV module and TV set production. Local industry rumors had previously speculated about plans on the part of Chinese TFT-LCD manufacturer BOE (000725.SZ; 200725.SZ) to invest USD 4 to 5 bln (roughly RMB 28 bln) in the construction of an 8.5G LCD panel production line in Chongqing. BOE has publicly denied the rumors.
Editor's Note: For more background on this topic, please see "HP, Foxconn to Build USD 3 Bln Laptop factory in Chongqing" MD 8/05/09 issue and "Rumor: BOE to Build 8.5G Panel Line in Chongqing" MD 10/10/12 issue.
Keywords: Chongqing Western China Terry Gou module Foxconn TV set 2038.HK 2354.TW LCD TFT-LCD 000725.SZ BOE smart TV production facility display contract manufacturer 200725.SZ
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