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Exclusive: Foxconn plans to sell $ 8.8 billion in China



By Yimou Lee

TAIPEI (Reuters) – Taiwan's Foxconn is testing the sale of its new $ 8.8 billion billboard factory in China. China trade war.

Foxconn, formerly known as Hon Hai Precision Industry, is in talks to hire banks to find a buyer for its liquid crystal display (LCD) factory, which is being built in the southern Chinese city of Guangzhou, providing people with direct knowledge of the matter ,

A sale would come at a tricky time for Foxconn, which is investing heavily in China, a large number of American customers, including Apple Inc., and taking a difficult path to a protracted trade war between Washington and Beijing. It would be one of his biggest sales from China.

Foxconn's talks are in an early stage, and no price tag has yet been created for the so-called Gen 10.5 facility, which specializes in LCD large screens, the sources adding a sale is not certain.

"It's not a simple sale, and it could take a while," one of the sources cited the soft global demand for large LCD screens.

Foxconn reported in a In a written statement to Reuters, it said: "For corporate policy reasons, Foxconn is not responding to market rumors or speculation." The sources demanded anonymity, as the deliberations are confidential.

President Donald Trump sharply increased the stakes in the bloody trade war with China and turned the global financial markets on its head by promising on Thursday, from September 1, a 10 percent tariff on $ 300 billion Chinese imports.

The Trade War has disrupted global technology supply. This forces Foxconn to review its own. This and the slowdown in demand for large screen televisions and monitors had led Foxconn's management to seek a buyer for the LCD system, one of the sources familiar with management considerations.

Also within Foxconn were questions about the need for the Guangzhou project. "Existing facilities are already underutilized … why one more?", It said in the source.

The second source said the new factory would not be up and running until the beginning of October, making it less attractive to buyers because of the added risks compared to an existing plant.

The Nikkei daily reported earlier this year that the company would delay most of its planned production in Guangzhou for at least six months, but Foxconn said the project was on schedule.

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Foxconn, the largest single investment of all time in the southern city by the Chinese media, announced the Guangzhou plant in 2016 and hoped to be operational by 2019 in anticipation of the expected increase in demand for large-screen televisions and TV sets to satisfy Monitors in Asia challenge the Chinese top display manufacturer BOE Technology Group out.

The project was conducted primarily through a joint venture between the Guangzhou Government and Japanese company Sakai Display Products, an advanced manufacturer of visual display units. A factory owned by Foxconn founder Terry Gou and Japanese Sharp Corp., Foxconn's display unit ,

The Japanese panel maker announced Thursday that they were building a factory in Vietnam to manufacture flat-panel displays and electronic devices against additional US import duties on Chinese goods.

The global display industry is struggling with oversupply and falling revenues due to the dying of televisions and smartphones and the worsening trade dispute that could increase product prices and dampen consumer demand.

Sharp reported Thursday a double digit profit decline for the June ending quarter due to sluggish tech demand.

Taipei-based Foxconn said in April that, given growing skepticism about the fate of continuing to build a display plant and tech research facilities in Wisconsin, the $ 10 billion project is underway. Trump had cited Foxconn's Wisconsin plans as proof that he was reviving the American manufacturing industry.

But Foxconn is already in the limelight because it has not met Wisconsin job creation goals.

The company told Reuters earlier this year that it is re-thinking its plans to produce advanced LCD panels in Wisconsin.

(coverage by Yimou Lee, editors Anne Marie Roantree and Muralikumar Anantharaman)


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