Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, is to invest US$30 million to set up a solar battery manufacturing plant in China.
In an announcement filed with the Taiwan Stock Exchange, Hon Hai said on Tuesday that the solar battery firm would be located in Funing, Jiangsu Province, but the company did not disclose further details about the new investment.
Market analysts said it is the first time Hon Hai has made inroads into the solar energy business, in line with many of its local counterparts, and the move is seen as a bid to boost its bottom line, which has been squeezed by fiercer than ever competition.
Hon Hai chairman Terry Gou (郭台銘) said at an annual general meeting held in June that his company was determined to establish itself in the solar energy market after two years of careful assessment.
Gou said Hon Hai’s solar energy investment would be a long-term program and would take advantage of the company’s high-tech development and its abilities in supply-chain management.
An analyst said the particular US$30 million deal represented just a fraction of Hon Hai’s massive overseas investments, such a US$12 billion project to build a tablet computer and flat panel production base in Brazil.
Analysts said Hon Hai would use the Funing plant to test the waters in the solar energy arena, before coming up with further investments. They added the location of the new plant is expected to help Hon Hai gain access to potential customers in China.
In January, Hon Hai and its affiliates under Hon Hai Group (鴻海集團), which is also known as Foxconn Technology Group (富士康科技集團), were planning to acquire a 44.78 percent stake in Taiwan-based solar battery supplier E-Ton Solar Tech Co (益通) through a private placement, but the deal fell apart.
Local media also reported Hon Hai might work with GCL-Poly Energy Holdings Ltd (保利協鑫能源), one of China’s largest polysilicon manufacturers, on solar-energy investments.