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Trade war

Foxconn to go ahead with Wisconsin plant after Trump call

Taiwanese company promises 13,000 jobs but mum on LCD production details

U.S. President Donald Trump takes part in a groundbreaking ceremony with Foxconn Chairman Terry Gou, right, and then-Wisconsin Gov. Scott Walker, left, at Foxconn's new site in Mount Pleasant, Wisconsin, last June.   © Reuters

TAIPEI -- Foxconn Technology Group said on Friday that it will go ahead with the construction of a plant in the American state of Wisconsin, following direct communication between Chairman Terry Gou and U.S. President Donald Trump.

The announcement came just days after reports that parts of the $10 billion project would be suspended.

"Great news on Foxconn in Wisconsin after my conversation with Terry Gou!" Trump tweeted Friday afternoon.

In a statement, the Taiwanese company said it is "moving forward with our planned construction of a Gen 6 fab facility," referring to a plant that would produce smaller liquid crystal display panels. Such a factory has been the focal point of the project reportedly benefiting from nearly $4 billion in state and local incentives.

The Apple supplier, formally Hon Hai Precision Industry, issued statements following initial reports by Nikkei and Reuters of changes to the project.

"While Foxconn's need to be responsive to the global market environment has necessitated a reconsideration of which technology will best suit the needs of its customers, its commitment to the construction of the Wisconn Valley Science and Technology Park campus and the creation of 13,000 jobs in Wisconsin remain unchanged," it said.

The facility will be constructed in the next 18 months, Foxconn said. The site's seven locations will include a research and development center, a high-performance data center, and a center related to artificial intelligence and 5G communications, it said.

For LCD panels, Foxconn will set up a plant that will handle the downstream process covering the installation of backlights and driver circuitry. This would also cover final assembly of such products as televisions. The company's statements did not touch on upstream, which involves creating core components from glass substrates, signaling that outsourcing is likely for this process.

But in panel manufacturing, huge investments generally involve the upstream side. It is uncertain whether Foxconn's revised plan meets the $10 billion in investment promised to Trump.

Sources say Foxconn suspended construction on the planned Wisconsin panel plant in light of the market deterioration brought on by the U.S.-China trade war, as well as recruitment difficulties.

An engineering team set up by subsidiary Sharp and panel-making affiliate Innolux has already been dissolved.

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