Hon Hai Precision Industry Co., better known to the technology industry as Foxconn, is set to manufacture solar panels in Japan starting 2014. The Taiwan-based company, one of the largest contract manufacturers in the world is looking to enter into deals with Japanese solar-powered battery makers to reduce currency vulnerabilities.
The solar panel industry all over the world is quantified by the amount of electricity it provides in kilowatts. In 2012, Hon Hai manufactured solar panels with the total output capacity of 30,000kw – the total is less than 1% of the global market output for solar panels. Hon Hai is looking to improve on that situation by tapping into the efficient manufacturing processes of Japan, where the plan is to increase total output capacity per year to 400,000kw, more than ten times their 2012 total. To make this goal possible, Hon Hai has put a lot of effort into fully automating its production and quality control operations. The result is a very short 5-day delivery system, a very notable achievement to help in expanding its markets in the global solar panel market.
“We can reduce currency risks if we produce in Japan,” said a senior Hon Hai official who refused to be identified. Foxconn, in the world of technology, is synonymous to low-cost production technologies and manufacturing. The Taiwanese company will be sure to look at prevailing market conditions before it decides on the size of its production base in Japan. Recently, Hon Hai was on the brink of investing heavily in financially troubled electronics giant Sharp, but pulled out because of the drop in the Japanese company’s stock price due to outstanding debts and lack of buyer confidence in the company.
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