Foxconn Groundbreaking Date Changed to Accommodate President Trump
The date for the Foxconn Groundbreaking Ceremony is again set for June 28th, and several changes in the schedule have occurred in order to accommodate the schedule of President Trump, according to this article from the Milwaukee Journal Sentinel.Last week, I had been frustrated after receiving my invitation letter to the event. The original "Save the Date" email that I received on May 10th had indicated the event would be on June 28th. Then I received an updated note on June 1st indicating that the date had been changed to the afternoon of June 29th. Finally on June 15th I received the invitation to the event, on June 28th. Since I had just changed my hotel reservations on the 14th, I was annoyed at the change, but speculated that it might be because of the President, and it looks like that will be the case.
Also this week we've seen news that two Foxconn companies have purchased ownership stakes in US TV maker Vizio. Hon Hai Precision Industries will acquire a 3.1% stake in Vizio for $24.99 million, and Innolux will take a 4.14% stake in the company for $44.99 million. Foxconn had previously owned a 6.6% stake in Vizio, so with the new investments the Foxconn companies share has increased to 13.84%. These combined Foxconn purchases imply a market capitalization for Vizio of $956 million, less than half of what Vizio owners were supposed to receive from a disastrous acquisition deal from LeEco in 2016.
The Foxconn-Vizio deal signals that the TV sets coming out of their Wisconsin facility may be Vizio brand. Although Foxconn owns a controlling interest in Sharp Corporation, the rights to the Sharp brand for TVs in the USA belong to Hisense until 2020, in a deal made before the Foxconn acquisition. This may help Vizio avoid tariffs imposed on TVs imported from China. While the US Trade Representative removed TVs from its list of initial tariffs, President Trump's direction to add an additional $200 billion in Chinese imports to receive punitive tariffs means that TVs will almost certainly go back on the list. Therefore, Vizio needs to shift production away from China. With President Trump also threatening to pull out of NAFTA, producing TVs in the United States might be the best option for Vizio.
Finally, an article in the Milwaukee Business News (which quotes me) confirms a rumor of several weeks ago that the Foxconn plant will not be a Gen 10.5 plant as originally planned, but rather will be a much smaller Gen 6 plant. Gen 10.5 glass substrates are 2940mm x 3370mm (about 10 feet by 11 feet), while Gen 6 are 1500mm x 1850mm (about 5 feet by 6 feet). Foxconn had denied those rumors four weeks ago, but Foxconn's Louis Woo confirmed them to the BizNews. Apparently the investment required for a glass plant was a significant barrier to Gen 10.5, but glass investment will not be required for Gen 6, as Corning has the capability and capacity to make Gen 6 glass in its Harrodsburg, Kentucky plant.
I have my invitation to the groundbreaking next week, you can be sure I'll be posting about that after the event.