Foxconn Plans American Expansion as Clients Seek Made in U.S.A.

Photographer: Bowen Liu/Apple Inc. via Bloomberg

Tim Cook, chief executive officer of Apple Inc., left, visits the iPhone production line at the Foxconn Technology Group facility in Zhengzhou, Henan Province, China. Close

Tim Cook, chief executive officer of Apple Inc., left, visits the iPhone production... Read More

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Photographer: Bowen Liu/Apple Inc. via Bloomberg

Tim Cook, chief executive officer of Apple Inc., left, visits the iPhone production line at the Foxconn Technology Group facility in Zhengzhou, Henan Province, China.

Foxconn Technology Group, the major supplier to Apple Inc. (AAPL) and Hewlett-Packard Co. (HPQ), seeks to expand its operations in North America as customers request more of their products be Made in U.S.A.

“We are looking at doing more manufacturing in the U.S. because, in general, customers want more to be done there,” Louis Woo, a Foxconn spokesman, said in a phone interview. He declined to comment on individual clients or specific plans.

Apple, the world’s most valuable company and Foxconn’s biggest client, plans to spend more than $100 million next year on building Mac computers in the U.S., Chief Executive Officer Tim Cook said in a Bloomberg Businessweek interview published yesterday. Foxconn, based in Taipei, has 1.6 million workers globally, including factories in California and Texas that make partially-assembled products such as servers, Woo said.

“Supply chain is one of the big challenges for U.S. expansion,” Woo said. “In addition, any manufacturing we take back to the U.S. needs to leverage high-value engineering talent there in comparison to the low-cost labor of China.”

Foxconn Chairman Terry Gou, who founded the maker of iPhones, iPads, PlayStations and televisions in Taipei 38 years ago, wants to bring U.S. engineers to Asia to train them in manufacturing before deploying them back home, he said at a forum last month.

Proximity Advantage

With more than 1.5 million workers at factories scattered around China, Foxconn also benefits from having suppliers located nearby, boosting flexibility, cutting delivery times and reducing transport costs. Some of the parts, such as core processors for its phones and glass used in displays, are manufactured in the U.S.

Apple’s iPhone, which carries the moniker “Designed by Apple in California. Assembled in China,” gets its screens from Asia while many of the chips are designed by U.S. companies and manufactured by outsource manufacturers such as Taiwan Semiconductor Manufacturing Co. (2330) Its Macs, iPods and iPads are also assembled in China.

Apple’s Cook didn’t outline where the manufacturing would happen or how much would be produced in the U.S. Operations would include more than just final assembly, he said.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net.

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