Business Column

Why Apple’s major iPhone supplier should build a factory in upstate New York, not Pennsylvania

Foxconn Technology Group, the world’s largest electronics contract manufacturer and Apple’s major iPhone supplier, is considering investing $7 billion to build a factory in the United States.

Although Pennsylvania has been proactive in contract talks for the factory, New York state is also a contender. The state’s background in fiber optics and the city of Corning’s reputation for glass technology make a good case for the Foxconn factory to be built on New York soil.

New York state is actively pursuing a Foxconn factory, according to The Times Union, and has already approved $600 million of funding to build and equip the new factory. Utica seems to be the likely destination if the factory does come to New York, and the city has space available in the Marcy Nanocenter at the State University of New York Polytechnic Institute campus, according to The Times Union.

For the Taiwan-based Foxconn, a factory in the U.S. could cut down shipping costs by centralizing screen production. New York state could provide an excellent location for a Foxconn factory, given the highly educated work force and eagerness by state lawmakers to attract high-profile manufacturers. Economic incentive will most likely be the driving factor behind Foxconn’s decision, and New York state should prepare to make financial accommodations if it hopes to get the manufacturer’s signature.

Some speculate that Foxconn had been considering a factory in the U.S. for some time, but President Donald Trump and his rhetoric regarding foreign imports and bringing jobs back to the country may have expedited plans. The factory, which would manufacture flat panel displays, could create 30,000 to 50,000 jobs, according to The New York Times.

Eugene Liu, a professor of economics at Syracuse University’s Maxwell School of Citizenship and Public Affairs, said he doubts that the factory will have as significant of an economic impact as expected if the plans come to fruition.

“I would say don’t get your hopes too high in terms of a huge employment impact. There will be jobs. As long as there is investment, you need people to work,” Liu said. “But I think that if we’re expecting this investment to result in explosive job growth, we may be disappointed.”

Best known as Apple’s largest supplier of iPhones, Liu said it’s unlikely that Foxconn would assemble any iPhones at its U.S. factory. Liu predicts the factory will focus more on research and development as opposed to large-scale manufacturing.

“There’s a reason manufacturing is done in China: the labor costs,” Liu said. “If they manufactured iPhones in the U.S., it would be done by machine.”

Upstate New York’s strong reputation for optics and glass technology is the likely reason Foxconn would consider a factory in Utica. Corning Incorporated of Corning, New York, has been a pioneer in the glass display industry for many years, and Foxconn will most likely be looking for its expertise in smartphone displays, Liu said. But he added that taxes in New York state are higher than those in Pennsylvania.

When talking manufacturing on Foxconn’s scale, it may be difficult for New York to prove it’s worth the extra operating costs. Foxconn wants the display technology that Corning and upstate New York provides, but a town in Pennsylvania near the New York border may prove too tempting of a compromise.

Alex Straus is a sophomore public relations major and finance minor. His column appears weekly. He can be reached at astraus@syr.edu.

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