Foxconn, the contract manufacturer of iPhone, plans to build a factory in Zhengzhou, Henan province, to manufacture touch-screen for iPhones, according to a report.
The news prompted speculations that the factor in Henan will manufacture transparent body and sapphire screen of the smartphone, said China Economic Weekly.
It said that Foxconn stands to make $45 to $52.5 per iPhone if the company can produce touch-screen by itself. Since Foxconn established its manufacturing facility in Henan in 2011, it primarily assembles iPhones for export. It produced 96.45 million iPhones and exported 84.46 millions of them in 2013.
"The relevant parties have signed an agreement to invest in the new facility," said a government official. "It will cover an area of 330 acres, will manufacture touch-screen for smart-phones, and it is conveniently located next to the assembly plant for iPhone 6, in north of Zhengzhou Airport Economic Development Zone."
Smartphones are already a major export in Henan province. According to data from Henan Customs services, Foxconn exported 84.46 million iPhones valued at $19.69 billion, representing 54.7 percent of total exports of Henan province.
"Huge market, cheap labor cost, transportation hub, cooperative local government and preferential economic policies for high-tech enterprises are probably the reasons why Foxconn chose Henan province as its manufacturing base," Said Wen Jin, the general manager of Zhongjin Guorong Asset Management (Beijing) Co Ltd.
Korea is currently leading the world in high-tech research and development followed by Japan. In order to compete with the market leader, Foxconn has begun recruiting top talent with competitive salary packages and stock options, according to Wen Jin.
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