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March 26, 2013

Hold the Phones: Foxconn Diversifies in China with Solar Projects



As Samsung surpasses its own sales records with its Galaxy S3 and S4 smartphones —and comes ever-closer to “upsetting the Apple (News - Alert) cart” with its clever advertising campaign against the iPhone, companies in the supply chain are taking note.

In fact, the company that is infamous for supplying Apple with low-priced overseas labor and manufacturing—Taiwan’s Foxconn—is looking for ways to cut possible losses, should Apple take a market tumble.

Now, according to ZD Net, China’s Ministry of Commerce has announced that Foxconn is investing heavily in the nation’s solar market—despite the disarray caused this month by the bankruptcy of Wuxi Suntech Power Co., Ltd.

The Ministry released word this week that Foxconn is investing in one research center, five solar-power components factories, and 20 solar-power plants in the southern province of Guangxi.

Guanxi already has several solar projects of national repute. For example, Guangxi Women and Children’s Hospital represents a national solar photovoltaic power generation building demonstration project, completed in June 19, 2012, and tied to the grid.

Since 2012, Foxconn has been realigning its business and hedging its bets with a major investment in solar power—spending nearly ¥100 billion (US$16 million) in other provinces in China, where the government has provided solar manufacturers with heavy subsidies. Foxconn also has been continuing talks with the ailing Japanese LCD display manufacturer, Sharp (News - Alert), for a substantial share in that company.

Indeed, with higher labor costs, lower margins, and more competition, Foxconn —which is the world's biggest contract maker of cell phones— reported a net loss of $316.4 million in 2012.

Foxconn is hoping for a rebound during the second half of the year, when Apple launches of new versions of its iPhone (News - Alert) and iPad.  Apple will have to include some new bells and whistles to continue satisfying its loyal customer base. The Galaxy S IV, launched in New York on March 14, has set the bar higher with its new eye scrolling feature. The phone tracks a user’s eyes to determine where to scroll, according to The New York Times. For example, when users read articles and their eyes reach the bottom of the page, the software automatically scrolls down to reveal the next paragraphs of text.




Edited by Brooke Neuman

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