Taiwan-based manufacturing giant Hon Hai Precision Industry Co. is seeking partners in the United States market to build up its production of batteries for electric vehicles and their components, according to a U.S. brokerage.
In a research report released Tuesday, the American securities house said iPhone assembler Hon Hai, better known as Foxconn internationally, has set up EV battery management system production lines in Ohio.
Hon Hai is continuing to look for partners in the U.S. market to build up that capacity and take advantage of tax incentives under the Inflation Reduction Act, which was signed into law by President Joe Biden in August 2022 to take on climate change, the brokerage said.
In addition to lithium iron phosphate (LFP) batteries, the brokerage said, Hon Hai is also developing solid state batteries that can potentially solve problems related to liquid Li-ion batteries, such as flammability, limited voltage, and poor cycling performance and strength.
In Taiwan, Hon Hai is building an EV battery line in Kaohsiung targeting the electric bus market that is expected to start mass production in 2024, the brokerage said, but it did not specify whether it was ready to produce or had begun producing batteries in Ohio.
Hon Hai, a contract electronics manufacturer that counts Apple among its main clients, has invested heavily in EVs to diversify its business.
At an investor conference held in mid-August, Hon Hai said mass production in Taiwan of the SUV Model C made by Foxtron Vehicle Technologies, a joint venture between Hon Hai and Taiwan-based Yulon Motor Group, was expected to begin in the fourth quarter.
Further developments in the EV arena are expected to be unveiled on Hon Hai Tech Day scheduled for Oct. 18, the company has said.
In the research report, the U.S. brokerage cited Hon Hai as saying that the ongoing inventory adjustments in the server and Internet communication device market were coming to an end and that demand for the two products was expected to pick up next year.
Hon Hai has said it accounts for more than 70 percent of global sales of graphics processing unit (GPU) substrates and GPU modules used in AI server production and can provide comprehensive solutions for AI-related product use such as AI servers and data centers.
As for the iPhone 15 series launched by Apple, Hon Hai said the new gadgets have done well in preorder sales in many markets, the brokerage said.
In China, the latest iPhone models have been a hit in the market despite the introduction of a new top-of-the-line model by Chinese telecom giant Huawei after apparently evading sanctions by Washington, the brokerage said.
At its August investor conference, however, Hon Hai’s guidance was not as optimistic, predicting that 2023 sales would fall slightly year-over-year, a downward revision from a previous estimate in May, when it said its 2023 sales would be flat.
