Terry Gou of Foxconn said that in the light of the recent comments from the new US President, the company would consider building a display plant, through its Sharp subsidiary. The information was inadvertently disclosed by Masayoshi Son from SoftBank, after discussing it with Gou in December. Gou said that costs of land, water and electricity would all be factors in making a decision.
Analyst Comment
Ross Young and Bob O’Brien of DSCC published a detailed blog on this topic, but the issue is simple. All of the recent investments in LCD and most of the decisions on OLED plants have been in China because of local and national government support. The industries in Korea and Taiwan also needed a lot of support and cooperation from government, in the past.
Secondly, if you are planning an LCD fab, you need a lot of glass. That probably means you need a decision by the dominant supplier, Corning, to support the move. Corning has some facilities in the US, but not with the capacity for a large fab, we would expect. Whoever was the supplier would have to commit to a big investment, with, potentially, only one client. That, it seems to me is very unlikely. Other materials should not be a problem as they have low bulk and weight, and high value, so are easy to transport.
If you’re building LCDs, then you need to assemble the cells with backlights etc and that means a fair amount of labour, so even in Asia, companies tend to do that in China, even when the cells are made in Korea or Taiwan. Where would a US cell be assembled with low labour costs? Of course, if large OLED was the target, module assembly is not an issue, but trying to build a large OLED fab would be a huge technical risk.
The only situation that might drive this kind of decision and investment would be, in my view, a dramatic import tariff on panels from Asia. Would a poplulist force up the prices of big TVs for political reasons? Anything, of course, in this new era, is possible.
DSCC also said that capacity restraints, especially for G10.5 equipment, would probably mean that it would be hard to get the equipment needed before 2020 and with building and a ramp-up. By the time you got to full production, President Trump would be up for re-election, if he is still in place. I’m not sure I’d bet $7 billion with that background! (BR)
