Foxconn, the world’s top contract manufacturer and Apple’s favorite gadget assembly shop, is planning on burning NT$80 billion, or approximately $2.6 billion, on a brand new manufacturing facility in Taiwan that will produce displays exclusively for Apple, Bloomberg reported Thursday morning.
The plant will employ more than two-thousand workers and is being built after “an urgent request for exclusive capacity” from Apple, indicating that the iPhone maker is anticipating growing demand for its devices in the coming years.
Equipment for the plant will be installed next month, with mass production of panels to start by the end of 2015, representative for Foxconn’s display unit Innolux told Bloomberg.
The advanced sixth-generation plant will be built at Innolux’s Kaohsiung Science Park campus in Southern Taiwan. Foxconn operates dedicated plants in China where iPhones and iPads are being assembled so this would mark the first time Foxconn built components that go into Apple’s devices.
Foxconn two years ago partnered with Sharp in the hope of tapping the Japanese giant’s advanced IGZO display plant to produce screens for iPhones and iPads, but ongoing manufacturing woes and low yields have prompted it to abandon the idea.
Now the Taiwanese manufacturer is looking to take matter into its own hands.
By tasking Foxconn with producing screens on an exclusive basis, Apple is clearly taking additional steps to avoid product shortages in the future while reducing exposure to its other tablet and smartphone screen suppliers such as Samsung Display, LG Display, Sharp and Japan Display.