Apple Inc (NASDAQ: AAPL) supplier Hon Hai Precision Industry Co Ltd’s (OTC: HNHPF) is in talks with Saudi Arabia to jointly build a $9 billion multipurpose facility, The Wall Street Journal reported on Monday, citing people familiar with the matter.
What Happened: The Taiwan-based supplier, better known as Foxconn, could make microchips, electric-vehicle components, and other electronics like displays at the mega factory, according to WSJ.
The proposal to build a dual-line foundry for surface-mount technology and wafer fabrication is currently under review by the Saudi Arabia government, the report said, adding that discussions had started last year.
Foxconn did not immediately respond to an email seeking comment at press time.
Foxconn is also in talks with the United Arab Emirates for potentially locating the project there, the report said, citing one of the sources.
See Also: Tesla Rival Lucid Cuts 2022 Production Target By Up To 40% Due To Extraordinary Supply Chain Issues
Proposal Terms And Scope: Large incentives including financing, tax holidays and subsidies for power and water in exchange are the key incentives Foxconn is seeking, it was reported.
The Saudi government could sweeten the offer with direct equity co-investment, industrial development loans, low-interest debt from local banks and export credits, according to the report.
Saudi Arabia’s Public Investment Fund owns a majority stake worth $26 billion in electric vehicle maker Lucid Motors Inc (NASDAQ: LCID), which recently got listed and announced plans to open its first overseas manufacturing plant in Saudi Arabia.
Lucid is seen as a rival to Tesla Inc (NASDAQ: TSLA) though it is yet to establish its manufacturing footprint and scale.
Price Action: Hon Hai stock closed 3.5% lower at $6.8 a share on Monday.
Photo by Puddingworld on Wikimedia
