Asian technology giants Foxconn and SoftBank have announced a joint venture that could potentially be worth $1.2 billion. While the purpose of the joint venture was not specified, it may be related to recent announcements by both companies regarding plans to expand in the United States.
Foxconn will retain a 54% stake in the venture, at an investment cost of $600 million. The deal, set up by the SoftBank Group Capital APAC subsidiary, will be finalized on March 1.
While the intent of the venture has yet to be stated publicly, details have shown that a Foxconn subsidiary will purchase a controlling stake in the APAC Capital arm of SoftBank Group, thereby changing what was a SoftBank unit to a joint venture between the two companies.
The partnership will invest in Foxconn’s manufacturing and technology services, applying SoftBank’s expertise in investments to maximize the profitability of the effort. Foxconn, with its controlling stake, will be responsible for management of the operation as a whole.
Just last month, Foxconn chairman and CEO Terry Gou confirmed that the company was considering establishing an LCD display panel manufacturing facility in the United States. The factory, which may be located in Pennsylvania or Virginia, could cost up to $7 billion and create up to 50,000 jobs.
Gou said publicly that Foxconn was interested in a U.S. manufacturing facility after pictures were shown of SoftBank CEO Masayoshi Son meeting with Donald Trump last December, holding papers emblazoned with the Foxconn logo.
At the time, Gou said that the company had considered expanding to the U.S. with a manufacturing facility for years, and that the idea had been revisited during a recent meeting between Gou and the CEO of SoftBank.
The new joint venture is one more in a series of ongoing partnerships between the two companies. Foxconn reportedly sounded out SoftBank for assistance during last year’s acquisition of Sharp. Foxconn is the manufacturer for SoftBank’s humanoid robot Pepper.
The two companies also partnered with Bharti Enterprises to establish a $20 billion clean energy initiative in India.
Foxconn, a major manufacturer of Apple components, was also reportedly part of a 10-party consortium looking to purchase a controlling stake in the Toshiba flash memory business. Toshiba is the largest current supplier of flash memory for the iPhone.