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Coronavirus

Foxconn to mass produce ventilators in Wisconsin from May

Taiwanese iPhone assembler strengthens ties with Trump administration

Terry Gou, with Donald Trump, spearheaded a tie-up between his company, Foxconn, and U.S. company Medtronic to build ventilators.   © Reuters

TAIPEI -- Taiwanese iPhone assembler Foxconn, the world's largest contract manufacturer, will begin producing ventilators in the U.S. to help alleviate a shortage there, the company said Wednesday, as COVID-19 rages across the country.

It will team up with Minnesota-based medical device company Medtronic to make the ventilators at its Wisconsin plant.

Foxconn, which is formally traded as Hon Hai Precision Industry, said the collaboration with Medtronic has been spearheaded by founder Terry Gou and preparations for production are already underway. Medtronic Chief Executive Officer Omar Ishrak told CNBC that mass production will begin next month.

Medtronic, which is legally headquartered in Ireland, is also teaming with other manufacturers and will be able to offer 1,000 ventilators a week by the end of June.

Construction on Foxconn's Mount Pleasant, Wisconsin, plant began with much fanfare in June 2018, with U.S. President Donald Trump and SoftBank Group chief Masayoshi Son joining Gou for the groundbreaking ceremony.

Gou, in a 2017 news conference with Trump at the White House, had initially announced the Wisconsin project would be a $10 billion investment that would see the factory churn out cutting-edge liquid-crystal displays that use large glass substrates. But as Chinese rivals increased production of similar products, Foxconn was forced to review the products it would make in the U.S.

Since then, plans for the Wisconsin plant have shifted to producing smaller LCD panels, as well as research and development for artificial intelligence and medical devices.

Production of ventilators could serve as a launchpad for Foxconn to enter medical-device production in the U.S. The company has previously talked about making use of the 8K technology that Japanese subsidiary Sharp holds for its medical business.

Foxconn's decision to produce ventilators is likely also an attempt to strengthen relations with the Trump administration and the state of Wisconsin. The company had signed an agreement with Wisconsin to receive up to $4 billion in support, such as through tax breaks, but as the plans kept shifting, questions had been raised about the scale of job creation and the justification for such preferential treatment.

Wisconsin Gov. Tony Evers has repeatedly talked about reviewing benefits offered to Foxconn and has been in negotiations with the company.

Foxconn is best known for assembling Apple's iPhones at factories in China.

Other companies in the United States are also rushing to make ventilators as the coronavirus spreads. Ford Motor said last week it will produce 50,000 ventilators over the next 100 days at a plant in Michigan in cooperation with General Electric's health care unit, and can then build 30,000 per month as needed to treat patients infected by the coronavirus.

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