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Foxconn Electronics, the world’s largest contract maker of various electronics, and Hewlett Packard, the biggest supplier of personal computers globally, have reportedly agreed to build a PC assembly plant in Turkey to tap the European and Middle East markets. If the information is correct, this will be the second joint fab by Foxconn and HP.

There are no exact details regarding the Foxconn-HP plant in Turkey, but according to Taiwan Economic News, Foxconn Electronics plans to invest $60 million into the plant, which may indicate that the plant will have very large manufacturing capacities.

Back in mid-2007 the two companies agreed to jointly construct computer assembly factory in Saint Petersburg, Russia, industrial areas and have even acquired the land since then. The fab can be as large as 60 000 square meters and may employ up to 5 thousand of workers, according to some reports. Manufacturing capacity of the Foxconn-HP plant is expected to be 40 thousand of systems initially.

The collaboration between Foxconn Electronics and Hewlett Packard will definitely impact positions of the latter on the local PC markets and will allow to leave behind its rivals Acer Group and Dell, which are pretty aggressive these days. What should be noted is that plants in Russia and Turkey will not be as cost-efficient as those based on Southeast Asia due to higher labour costs and necessity to import components. As a result, it remains to be seen whether plants will be fully utilized before the global economic recession is over in, perhaps, several years time.

Last year Foxconn Technology Group (Hon Hai Precision Industry) recorded non-combined revenue of $42 363 billion (NT$147 trillion), up 19% year-over-year. Even though the company failed to keep a 30% revenue growth in the year, Terry Gou, chairman of the firm, said that his company will continue to grow this year, despite the global economic downturn.

Officials from Foxconn Electronics and HP did not confirm intentions to build a PC plant in Turkey.

Tags: Foxconn, HP, Hon Hai, Business


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