Taiwanese company Foxconn, known as Apple’s largest contractor, is negotiating with the Saudi authorities to jointly build a $ 9 billion enterprise in this country. It is proposed to produce microchips, components for electric vehicles and other electronics, according to The Wall Street Journal .
The Saudi government is considering Foxconn’s proposal to build a plant with two lines, one for chip production and one for mounting components on boards. The enterprise was proposed to be located in the high-tech city of Neome , which is under construction . Negotiations began last year.
Official Riyadh is now reportedly conducting a comprehensive review of Foxconn’s proposal and comparing it with similar projects of the company in other parts of the world. According to some reports, Foxconn is also in talks with the United Arab Emirates as an alternative site for the new facility.
The Saudi authorities reportedly want the company to ensure that at least two-thirds of the new plant’s semiconductor output goes into the company’s existing supply chain. This guarantees the presence of buyers and, accordingly, high profitability of the project.
In turn, Foxconn is looking for better conditions for creating a new enterprise, such as government funding, tax incentives, subsidies for electricity and water, and other preferences. Saudi Arabia could offer direct investment and favorable loans.
Foxconn needs this project to diversify its production capacity. With rising tensions between China and the US, the company has been placed in a potentially vulnerable position. In turn, Saudi Arabia seeks to diversify its economy by reducing dependence on oil.
A source: The Wall Street Journal