KSA, Foxconn Talks of Building $9 Billion Facility

Apple’s largest iPhone assembler, Foxconn, publicized talks with the Kingdom of Saudi Arabia (KSA) concerning plans of jointly developing a $9 billion multipurpose factor to create microchips, electric-vehicle components, in addition to a variety of different products. 

People familiarized with the plan stated that the Saudi government is considering an offer from the Taiwanese electronics company to develop a dual-lone foundry for surface-mount technology and water fabrication in the Kingdom technological metropolis, Neom. 

Neom, KSA’s tech-centered city, is currently in its development phase in the desert, with negotiations around the colossal project initiated last year, according to people close to the matter. 

In parallel, Foxconn is considering different offers from some of the largest powerhouse in the Middle East region, including the United Arab Emirates (UAE), as it is considering pitching and constructing the project there. 

As tension escalates between the leading global powerhouses, China and the U.S., Foxconn began seeking diversity in its manufacturing locations to prevent being caught in the geopolitical crossfire. 

The KSA is demanding a guarantee that it would place at least two-thirds of its founding foundry’s manufacturing into the Taiwanese firm’s current supply chain. This will secure buyers for its products in the region, as well project’s ultimate profitability. 

Foxconn is on the lookout for massive enticements, such as financing, tax holidays, and water and power subsidies in return to assisting in the robust and tech-driven manufacturing sector in the KSA as it makes a dramatic shift from being an oil-based economy to a tech one.  

As for Riyadh’s contribution, the country could offer Foxconn direct equity co-investment, industrial development loans, low-interest debt from local banks, and export credits to heighten its competition with other countries Foxconn is considering for its facility’s site.  

In recent years, the multinational electronic contract company has been seeking the expansion of its business model to exceed Apple products – what it is mainly known for – which includes directing its manufacturing power towards Electric Vehicles (EVs).  

The company has joint efforts with globally renowned automakers, such as Jeep and Stellantis NV, as well as electric vehicle start-up Fisker.  

Foxconn’s development tactics did not stop there as it also acquired semiconductor facilities, counting another Taiwanese company, Macronix International. This purchase will place it on the radar as it looks to make the shift to become a contract manufacturer of EVs for some of the most significant automaker brands on the market. 

Only last year, the iPhone assembler stepped down from taking charge of a liquid-crystal-display project in Wisconsin after finalizing an investment agreement valued at $10 billion, which if completed, would have resulted in hiring 10,000 people “qualify for $2.85 billion in incentives,” according to The Wall Street Journal. 

As for its projects in the Middle East, Foxconn revealed last year’s potential plans to develop an EV project in the region with an undivided focus on software and cloud manufacturing for cars. 

As a segment of his Highness the Crown Prince Mohammed bin Salman’s plans to shape the KSA’s industrial sector, the move will redefine the country’s economic power by founding new industries to accommodate its oil income. The world makes a global shift towards more sustainable energy solutions.