terry gou 1_rFoxconn Electronics reportedly plans to scale down its original project to build an advanced 10.5G LCD fab in Wisconsin and instead will set up a 6G line there, according to industry sources.

Major reasons for adjusting the investment project include: total investment for a 10.5G line is too vast to be paid off in a short period of time and the availability of new production capacity from 10.5G lines in China is expected to affect the global display industry, eventually undermining panel prices and profits, said the sources.

Foxconn has declined to comment on market speculations.

However, the sources continued that, aside from the investment costs, the construction of a 6G fab will allow Foxconn to roll out panels for more applications such as those for automotive, mobile and medical devices so that the investment risks can be alleviated through an expansion of shipping outlets.

The planned 6G fab will also enable Foxconn to utilize the advantage of proximity to provide Apple with small- and medium-sized panels, indicated the sources, adding that Foxconn may also set up assembly lines in the Wisconsin plant to make iPhones to help Apple avoid tariff risks arising from escalating trade rift between the US and China.

In line with the scale-down of investments in Wisconsin, the Foxconn Group has also decided to cancel a plan to spin off its LCD panel arm, Innolux, into several smaller entitiess depending on the nature of products they produce: such as large- or small-to medium-sized panels or end-market devices, said the sources.

Instead, Foxconn is undertaking a sweeping restructuring of the management team of its entire display business group as it is making efforts to stave off increasing competition coming from rival companies in China.

Under the new arrangement, former Innolux chairman Jyh-chau Wang has been assigned to work together with Hideo Taniguchi, president of Japan-based Sakai Display Products (SDP) to oversee the construction of the group's 10.5G line in Guangzhou, China, which is slated for volume production in 2019.

Meanwhile, Innolux incumbent executive vice president Chin-lung Ting and SDP director Yueh-way Sun will co-work to speed up the investment project in Wisconsin, said the sources.