In an event today at the White House, Foxconn Chairman Terry Gou was joined by President Donald Trump, Vice President Mike Pence, Wisconsin Governor Scott Walker, US House Speaker Paul Ryan, and others to announce the first ever investment for LCD manufacturing in the USA.
The planning for this investment stems from before the election, but certainly accelerated after the election. As many of you have read in this blog in the succeeding months, there were as many as seven states in the running for the deal, which in the end will be invested in the congressional district of House Speaker Paul Ryan in southeast Wisconsin.
The event started late, and with the conspicuous absence of President Trump, but Terry Gou thanked the attendees and discussed two main technologies behind the push. Gou referred to the “iPhone revolution”, and discussed the importance of 8K displays (TV displays with a resolution of 7680 x 4320) and 5G networks for mobile phone communications as transforming people’s lives in coming years.
Perhaps addressing questions asked by many in Asia in the display industry, Gou asked the rhetorical: “why in the USA?” answering that “TV was invented in the US, but the US does not have a single LCD fab. We are going to change that.” Gou said that the Hon Hai group, Foxconn and Sharp were all committed to this project.
Gou praised Governor Walker and thanked Jared Kushner for his work in the Office of American Innovation, and said (this was before Mr. Trump had arrived) that he had met three times with the President, and each time he had emphasized the importance of manufacturing in America, and providing high-skill jobs for American workers. Gou indicated that he was joining Trump in supporting ‘Buy American’.
(Pictured L-R) Wisconsin Governor Scott Walker, Vice President Mike Pence, Foxconn Chairman Terry Gou, US Speaker Paul Ryan, Wisconsin Senator Ron Johnson
Gou’s remarks did not include any details on the investment, and that was left for Governor Walker, who spoke next. Walker called this “a great day for the USA, for Wisconsin, and for Foxconn” as this project will be “the single largest economic development project in the history of the state of Wisconsin, and one of the largest in US history” including being the largest investment in terms of the number of jobs. Walker then gave some specifics about a Memorandum of Understanding (MOU) to be signed tomorrow between Foxconn and the state of Wisconsin:
Ryan and Pence also had short speaking points, Pence highlighting this as an “historic day for American jobs in the American heartland”, and saying that companies will continue to invest because “America is back”. Pence then introduced President Trump.
President Trump Remarks on LCD Investment as Vice President Pence and Speaker Ryan look on
In thanking Terry Gou, Trump called him “one of the great businessmen of the world” and praised the Foxconn chairman for vision by saying that “Gou put his faith and confidence in the future of the American economy.” Then, true to form, Trump said that “In other words, if I didn’t get elected he definitely would not be investing $10 billion.” While President Trump sometimes is challenged to distinguish between reality and his personal wishes, I think in this case he has a valid point. One of the main factors behind this investment is the threat of a more restricted trade environment (i.e. a potential trade war with China and Mexico) that Trump made a key part of his campaign message. Trump concluded the remarks with references to other administration priorities: health care, tax reform, infrastructure spending, etc.
What are the implications of this investment to the display industry? While the announcement did not give any specifics about the display fab, based on the discussions in the last few months, we can make some informed guesses:
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