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Foxconn splashes £1.6b on Apple-exclusive plant

Foxconn has answered Apple’s call for an increase in capacity by committing to building a huge display production plant in Taiwan that will be used solely to supply the company with units.

The firm will fork out some NT$80 billion [£1.66 billion] over the next couple of years to construct a complex that is slated to open for production by the end of 2014, according to Bloomberg.

Innolux Corp, Foxconn’s display unit, will build the sixth-generation plant at its Kaohsiung Science Park campus in Taiwan and Sophia Cheng, PR representative at the unit, stated that the factory would generate 2,300 jobs.

Foxconn already has a number of dedicated factories in Mainland China to assemble iPhones and iPads although this is the first such location purely dedicated to individual components inside Apple’s devices.

Prior to the launch of the new iPhone 6 and 6 Plus in September, the firm’s plant in Zhengzhou, China churned out a combined total of 540,000 smartphones per day, which was its highest daily output ever, yet that still didn’t meet the demand for preorders.

Apple has tried to tap companies for exclusivity before when it went head-to-head against Qualcomm to try and secure capacity from Taiwan Semiconductor Manufacturing Co [TSMC] for the manufacture of chips. On that occasion both firms were rebuffed, although Apple has had success gaining priority supplies of memory chips from Samsung and sapphire glass from GT Advanced Technologies.

The latter deal involved Apple paying $578 million [£369 million] to supply furnaces to secure the supply and it all went sour when GT applied for bankruptcy protection in October with a settlement hearing set to take place next month.

Securing an exclusive agreement for iPhone parts is important as the devices are often similar in availability to gold dust in the early weeks and having a supply of displays on tap will make it even easier for Apple to meet the phenomenal demand.

Image Credit: Flickr (Christopher Bulle)