Facing possible trade war, Foxconn says it may broaden range of products made at Wisconsin factory

As it prepares for a possible U.S.-China trade war, Foxconn Technology Group reportedly said this week that it may expand the range of products at the Wisconsin factory it has begun building.

The development came as Foxconn, which draws more than half its revenue from Apple Inc., signaled that it could move iPhone production outside China, its main manufacturing base.

And, speaking in Taiwan to analysts at a rare investor conference, key Foxconn executive Young Liu pointed to the importance of the Wisconsin project, according to a published report in Nikkei Asian Review.

Besides the liquid-crystal display panels that have long been planned for the Mount Pleasant factory, it could also be used to produce servers, networking products and central controls for automobiles, Nikkei reported.

The wider array of products now envisioned for Wisconsin "is all for addressing the need in the U.S. market," Nikkei quoted Liu as saying.

Liu, the head of Foxconn's semiconductor business, is considered a favorite to take over leadership of the company from Chairman Terry Gou, who is seeking the presidency of Taiwan.

Unlike previous changes scaling back the scope of Foxconn's much-watched Wisconsin project, Tuesday's developments appear to bolster prospects for a manufacturing complex here. After initially saying it would build a huge "Generation 10.5" display plant, Foxconn, citing changing market conditions, dialed back its plans to a smaller and less costly "Generation 6" factory.

FULL COVERAGE:Foxconn in Wisconsin

Foxconn has been responding to a shifting economic landscape, said Timothy Sheehy, president of the Metropolitan Milwaukee Association of Commerce.

"We've seen some headwinds on the project because of it, and maybe this is a tailwind," Sheehy said of word that Foxconn may expand the array of products it makes here.

It's important that Foxconn base decisions about its Wisconsin project on solid business factors, he said.

"Our ongoing hope has been that nobody's building a plant to satisfy a contract, (but rather) that they're building a plant to satisfy customer demand and good business use," Sheehy said. "Nobody wants this plant built for political purposes. Nobody wants this plant built for optics. We want it to be sustainable, and it's only going to be be sustainable if it meets the needs of customers here, primarily in the United States."

Initial contracts have been let for construction of the factory, which at 855,000 square feet would represent a small percentage of the 20 million square feet of facilities former Gov. Scott Walker announced Foxconn would build over the coming years.

Foxconn could receive $3 billion in subsidies from the state if it creates its promised 13,000 Wisconsin jobs and invested $10 billion in the Mount Pleasant complex. The company has said it remains committed to meeting those goals.

Foxconn will get the jobs and investment incentives only if it hits targets specified in the contract with the state. The firm fell short of the employment number required for it to receive any money for 2018 hiring.

Foxconn also stands to benefit from hundreds of millions of dollars of highway and utility projects being funded by taxpayers and ratepayers, and from infrastructure improvements and other help from Mount Pleasant and Racine County. The company has essentially guaranteed it will generate enough new property tax revenue to repay the local government expenditures.

Contact Rick Romell at (414) 224-2130 or rick.romell@jrn.com. Follow him on Twitter at @RickRomell