Foxconn mulls building $9 billion factory in Saudi Arabia

Foxconn Technology Group, the biggest assembler of Apple Inc. iPhones, is in conversation with Saudi Arabia about jointly building a $9 billion multipurpose facility that could produce electric vehicles (EV), microchips, and electronics like displays sources said.

The Saudi government is reviewing an offer from the Taiwanese firm, formerly known as Hon Hai Precision Industry Co., to build a dual-line foundry for wafer fabrication and surface-mount technology in Neom, a tech-focused city-state the kingdom is developing in the Saudi Arabian desert, the sources said. They also added that discussions over the project started last year.

Foxconn, the world’s largest contract electronics producer, and a major Apple supplier has expanded into areas including semiconductors and EVs in recent years.

The Saudi government wants the company to guarantee that it would direct at least two-thirds of the foundry’s production into Foxconn’s existing supply chain. The firm is seeking significant incentives, including financing, subsidies for power and water, and tax holidays in exchange for helping set up a high-tech manufacturing sector in the kingdom, the sources said, as the middle eastern kingdom looks to diversify its economy away from oil.

The Saudi could offer direct equity co-investment, low-interest debt from local banks, industrial development loans, and export credits to compete with other jurisdictions that Foxconn might consider.