TAIPEI -- Hon Hai Precision Industry, or Foxconn, plans to construct a major industrial park in the southern Chinese city of Nanning to manufacture smart televisions and other electronics.
Operations are to begin in stages by 2020. The Taiwanese company aims to reach 100 billion yuan ($15.3 billion) in annual production value at the site, which is expected to employ 70,000 workers, making it one of Hon Hai's biggest production bases on the Chinese mainland.
Chairman Terry Gou signed an agreement with the local government Feb. 25, the Nanning Daily newspaper's website reported, without saying how much the company would invest.
The industrial park will also serve as a laboratory for advancing Hon Hai's contract manufacturing business model using the networked factory machines that are part of the so-called fourth industrial revolution, or Industry 4.0. Besides TVs, the company aims to fill orders for servers, routers, interactive whiteboards and other electronics there.
Hon Hai first invested in Nanning back in 2010. The new industrial park will be nearly four times the size of its current operations there, which had a production value of 28.2 billion yuan last year.
Employing more than 1 million, Hon Hai ranks as the world's largest electronics manufacturing service provider, supplying the likes of Apple. With rising worker costs in the Pearl River Delta region squeezing its profit margins, its new investment in relatively less-developed Nanning will benefit from cheaper labor. And the city's location near the Vietnamese border suggests a bid to create a base for exporting to Southeast Asian markets.