Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Taiwan Stock Exchange  >  Foxconn Technology Co., Ltd.    2354   TW0002354008

FOXCONN TECHNOLOGY CO., LTD.

(2354)
  Report
SummaryChartsNewsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Foxconn, other Asian firms consider Mexico factories as China risks grow

08/24/2020 | 07:40am EST
FILE PHOTO: A sign announces the manufacturing complex of Foxconn PCE Technology, in Ciudad Juarez

(Repeats to widen distribution, no change to content of story)

HONG KONG/TAIPEI/MEXICO CITY, Aug 24 (Reuters) - T aiwan-based electronics manufacturers Foxconn and Pegatron are among companies eyeing new factories in Mexico, people with direct knowledge of the matter said, as the U.S.-China trade war and coronavirus pandemic prompt firms to reexamine global supply chains.

The plans could usher in billions of dollars in badly needed fresh investments over the next few years for Latin America's second-largest economy, which is primed for its worst recession since the 1930s Great Depression.

Foxconn and Pegatron are known as contractors for several phone manufacturers including Apple . It was not immediately clear which companies they would work with in Mexico.

According to two of the sources, Foxconn has plans to use the factory to make Apple iPhones. However, one of the sources said, there had been no sign of Apple's direct involvement in the plan yet.

Foxconn is likely to make a final decision on a new factory later this year, and work will commence after that, the two people said, adding there was no certainty the company would stick to the plan.

Apple spokesman Josh Rosenstock declined to comment.

Pegatron is also in early discussions with lenders about an additional facility in Mexico mainly to assemble chips and other electronic components, said the people, who declined to be identified as the talks are confidential. Pegatron declined to comment.

Foxconn has five factories in Mexico mainly making televisions and servers. Its possible expansion would underscore a broader and gradual shift of global supply chains away from China amid a Sino-U.S. trade war and the coronavirus crisis.

The plans come as the idea of "near-shoring" gains ground in Washington. The Trump administration is exploring financial incentives to encourage firms to move production facilities from Asia to the United States, Latin America and the Caribbean.

Brandishing a new deal locking in free trade with the world's biggest consumer market, Mexico also has geography, low wages and time zones in its favor. Despite the global recession and concerns about the business climate under President Andres Manuel Lopez Obrador, government data shows foreign investment largely holding up so far this year.

"The company indeed has contacted the (Mexican) government," a third source said about Foxconn, adding the talks were at an early stage and rising cases of coronavirus in Mexico were a major concern for the possible investment.

Taipei-headquartered Foxconn, formally called Hon Hai Precision Industry Co Ltd, said in a statement that while it continued to expand global operations and is an "active investor" in Mexico, it had no current plans to increase those investments.

Reuters in July reported Foxconn planned to invest up to $1 billion to expand a factory in India where it assembles Apple iPhones.

Foxconn Chairman Liu Young-way told an investor conference in Taipei on Aug. 12 the world was split into "G2" - or two groups - following Sino-U.S. tensions, saying his firm was working on "providing two sets of supply chain to service the two markets."

"The world factory no longer exists," he said, adding that about 30% of the company's products were now made outside China and the ratio could increase.

Foxconn unit Sharp has said it is stepping up television production in Mexico. Sharp last year said it would set up a plant in Vietnam to shift part of its China production. It said it had no further information to give.

China's Luxshare Precision Industry Co is also considering building a facility in Mexico this year to offset the tariff war between the world's two largest economies, the two sources said.

It was not immediately clear which product lines were being considered by Luxshare, which according to media reports is a leading manufacturer of Apple Airpods. Luxshare did not respond to a request for comment.

The Taipei Economic and Cultural Office in Mexico, which represents Taiwan's government in the country, said it had heard Foxconn was interested in building another factory in Ciudad Juarez, in the northern border state of Chihuahua.

"Pegatron, I also understand, wants to move a production line from China to Mexico," the office's Director General Armando Cheng told Reuters. He said he did not know details of either company's plans.

"Mexico is one of the ideal countries for companies considering readjusting their chain of suppliers," Cheng said.

The scale of investment by Asian electronics contract manufacturers, and the employment they would create in Mexico, are not yet clear.

Promised investment in new manufacturing capacity has not always materialized.

In 2017, U.S. President Donald Trump said Foxconn would build a $10 billion plant employing 13,000 people making LCD panels in the state of Wisconsin.

Those plans have shifted dramatically. In 2019 the company downgraded the size of the planned factory. In April, Foxconn said it would make ventilators at the plant in partnership with Medtronic.

STRETCHED SUPPLY CHAINS

Coronavirus ground cross-Pacific supply chains to a standstill, stranding automobile, electronics and pharmaceutical components from China, exacerbating firms' concerns about having their productive base an ocean away from American consumers.

Additionally, the newly implemented United States-Mexico-Canada trade deal requires more locally sourced inputs for tariff-free exports to the United States.

Mexico has spoken to a host of foreign companies in an effort to lure business from Asia to capitalize on the trade deal and was preparing to speak to Apple about relocating manufacturing, Economy Minister Graciela Marquez told Reuters in July.

She said she had not spoken to Foxconn, Pegatron and Luxshare directly. A senior government official said those companies were among others interested in investing in Mexico.

The government did not respond to a request for further comment prior to publication.

Despite the potential and solid investment figures, many investors see Lopez Obrador squandering a historic opportunity.

"It could have been a tidal wave," said Eduardo Ramos-Gomez, a partner at Duane Morris & Selvam, a law firm working with Taiwanese and Chinese companies looking at Mexico.

Critics cite Mexico's poor handling of the pandemic - it is third in global deaths – along with Lopez Obrador's meddling in private investment decisions such as the cancellation of a $1-billion brewery by U.S. firm Constellation Brands, the scrapping of a major airport project and pressure on energy companies.

The government has denied such decisions were anti-business.

Regardless, Mexico's appeal is attracting some.

Samuel Campos, an executive managing director of real estate brokerage Newmark Knight Frank, said his company is currently helping two Chinese companies, one in the autos sector and the other in manufacturing, relocate to an industrial cluster in Mexico.

Campos said electronics, medical and automotive firms in Asia are likely to help drive investments into Mexico in the fourth quarter this year. For Alan Russell, chief executive and chairman of Tecma Group, a company managing factories in Mexico, manufacturers in China that want to keep market share in North America have few choices.

"They're going to have shorten their supply chain and be more regional," he said. "It seems the virus has tipped the scale." (Reporting by Sumeet Chatterjee in Hong Kong, Yimou Lee in Taipei and Anthony Esposito and Daina Beth Solomon in Mexico City; Additional reporting by Stephen Nellis in San Francisco and Josh Horwitz in Shanghai; Editing by Frank Jack Daniel and Cynthia Osterman)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
APPLE INC. 0.48% 116.59 Delayed Quote.58.05%
CONSTELLATION BRANDS, INC. 0.05% 204.81 Delayed Quote.7.88%
FOXCONN TECHNOLOGY CO., LTD. 1.16% 52.2 End-of-day quote.-21.15%
HON HAI PRECISION INDUSTRY CO., LTD. 1.22% 83 End-of-day quote.-8.59%
LUXSHARE PRECISION INDUSTRY CO., LTD. -1.76% 50.18 End-of-day quote.78.72%
PEGATRON CORPORATION 0.91% 66.5 End-of-day quote.-2.78%
All news about FOXCONN TECHNOLOGY CO., LTD.
11/26Foxconn Will Move Some Apple Production to Vietnam, Reuters Reports
DJ
11/26EXCLUSIVE : Foxconn to shift some Apple production to Vietnam to minimise China ..
RE
11/20Taiwan October export orders up again, strong outlook seen
RE
11/18Vietnam says Taiwan's Foxconn starts factory to make displays
RE
11/18Vietnam says Taiwan's Foxconn starts factory to make displays
RE
11/12Foxconn sees strong iPhone 12 demand, reiterates U.S. investment
RE
11/12Foxconn sees strong iPhone 12 demand, reiterates U.S. investment
RE
11/12Foxconn sees strong iPhone 12 demand, reiterates U.S. investment
RE
11/12HON HAI PRECISION INDUSTRY : Foxconn Third-Quarter Net Profit Edged Higher on Im..
DJ
11/12HON HAI PRECISION INDUSTRY : Foxconn Technology Group Posted Nine-Month Net Prof..
DJ
More news
Financials
Sales 2020 106 B 3 735 M 3 735 M
Net income 2020 7 382 M 259 M 259 M
Net cash 2020 57 281 M 2 010 M 2 010 M
P/E ratio 2020 10,1x
Yield 2020 5,04%
Capitalization 73 695 M 2 583 M 2 585 M
EV / Sales 2020 0,15x
EV / Sales 2021 0,10x
Nbr of Employees -
Free-Float 64,1%
Chart FOXCONN TECHNOLOGY CO., LTD.
Duration : Period :
Foxconn Technology Co., Ltd. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends FOXCONN TECHNOLOGY CO., LTD.
Short TermMid-TermLong Term
TrendsBullishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus UNDERPERFORM
Number of Analysts 4
Average target price 53,33 TWD
Last Close Price 52,10 TWD
Spread / Highest target 15,2%
Spread / Average Target 2,37%
Spread / Lowest Target -13,6%
EPS Revisions
Managers
NameTitle
Han Ming Li General Manager & Director
Chih Chien Hung Chairman
Tzu Hung Li Head-Finance
Hsueh Kun Li Director
Fang I Cheng Director
Sector and Competitors