Hon Hai Technology Group (鴻海科技集團) said it plans to invest US$1 billion in Indonesia over next three to five years in the group’s latest move to shift manufacturing from China, where labor costs are on the rise.
Hon Hai chairman Terry Gou (郭台銘) has signed a letter of intent with a Jakarta government official on Friday to build factories there, a company official said by the telephone.
TWO YEARS’ RESEARCH
“Hon Hai has been evaluating investment opportunities in Indonesia for two years,” the official said.
Hon Hai planned to submit a concrete investment project within three months, according to a company statement released on Saturday. No details were disclosed.
The group operates Hon Hai Precision Industry Co Ltd (鴻海精密), which makes iPhones and iPads for Apple Inc.
Hon Hai is the biggest employer in China, hiring about 1 million Chinese workers.
Gou told reporters on Jan. 27 that Indonesia would be the group’s top priority this year in expanding manufacturing globally as China was evolving into “the world’s market from the world’s workshop.”
Indonesia has the potential to replace China as the world’s next workshop, Gou said at the time.
Gou also said that the US would be the next destination for the group’s manufacturing sites, with many of the group’s clients and partners hopeful that the manufacturer would base factories there.
The US is to play a pivotal role in Hon Hai’s manufacturing over the next 10 years, Gou told reporters.