Inspired by Trump, Samsung in Talks to Open South Carolina Factory

Taiwan’s Foxconn Eyes Seven States for $10 Billion Investment

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The Wall Street Journal is reporting that Taiwan’s Foxconn,  Samsung Electronics Company and LG Electronics are all poised to make big investments in the United States.  Foxconn Technology Group is preparing to decide on one of seven states where it plans to spend some $10 billion to expand its contract manufacturing operations, a move that will draw in Foxconn’s huge network of suppliers and parts distribution.

The Foxconn plant will produce flat panel displays and when this begins, the industry will have come full circle in the United States.  The display industry was actually developed in the U.S. in the 1960’s but the industry’s production operations quickly migrated to Japan and ultimately to Korea and Taiwan. The main reasons for the shift in production were the lower engineering and labor costs in Taiwan and Korea and the ability of these countries to raise the capital needed for investing in state-of-the-art fabrications facilities.  Flat panel display production is just one of several key U.S. industry innovations that were lost to lower cost areas. Getting some of this production back is huge!

At the same time, Samsung is in late-stage discussions to invest about $300 million to expand its U.S. production of home appliances at a former Caterpillar plant in South Carolina and Samsung rival LG Electronics is planning to build a washing machine factory in Tennessee, its first major U.S. plant.

The biggest take away from these stories is that that these companies believe that reining back logistics and shipping costs by producing appliances closer to U.S. customers will more than offset the potentially higher labor costs in the U.S.  Big winners from these investments will be the electronics supply chains as well as transportation and logistics providers.