Foxconn is in talks with the Saudi government to build a new $9 billion plant in Saudi Arabia, according to media reports on March 14. It is reported that the new plant will be located in Neom, the new technology city of Saudi Arabia, and will produce microchips, electric car parts and other electronic components such as monitors.
Foxconn is seeking large-scale incentives from the Saudi government, including financing, tax holidays and water and electricity subsidies, on the grounds of helping Saudi Arabia build high-tech manufacturing, according to a person familiar with the matter. At present, Saudi Arabia is seeking to diversify its economy away from its dependence on oil. Saudi Arabia is likely to provide direct equity co-investment, industrial development loans, low-interest loans from local banks and export credits to compete with other countries Foxconn may consider, according to another person familiar with the matter.
In addition to Saudi Arabia, Foxconn is also discussing with the United Arab Emirates the possibility of carrying out the project there, the report said. However, Riyadh, a city in the central Arabian Peninsula, wants Foxconn to ensure that 2/3 of the capacity of its new plant will flow to its existing supply chain to ensure that its products have buyers and that the project is ultimately profitable.
Saudi Arabia is conducting due diligence and comparing the project with similar Foxconn projects in other parts of the world. Neither Foxconn nor the Saudi authorities immediately responded to requests for comment.
Foxconn is the world's largest contract electronics manufacturer and one of Apple's major suppliers. In recent years, the company has expanded its business into areas such as electric vehicles and semiconductors. At a time when trade tensions between China and the US are affecting the semiconductor industry, the company and other Taiwanese companies such as TSMC are seeking to diversify production.
Foxconn has signed a number of investment agreements, including in Taiwan and India. Last year, however, the company sharply scaled back its planned $10 billion plant in Wisconsin, which former US President Donald Trump called "the eighth wonder of the world".
