Foxconn's EV assembly and production base in Ohio is currently the company's most important hub in North America. One of the key reasons why Foxconn chose this location is the supply chain ecosystem nearby. Foxconn CPO Jerry Hsiao pointed out that due to the nature of the automotive sector, the soundness of the surrounding supply chain ecosystem will have a very direct effect.
According to sources, previously during the GM era, there was already a supply chain ecosystem surrounding this factory site. However, when GM left, it also left a gap in the original ecosystem. There are still many strong suppliers here that have continued to service other local clients. However, as the number of clients, orders, and production demand increases, there is still a certain necessity for rebuilding the supply chain.
The necessity come from the fact that, although the overall component demand for EVs is already much smaller compared to traditional fuel vehicles, it's still in the thousands. Not only is it a much larger quantity compared to consumer electronic products but the parts are also much larger in size. Therefore, besides some small components that can be stocked, other larger parts need to be "Just In Time," produced daily to fulfill the demand for just that day.
It's this requirement for daily production that makes a complete supply chain so crucial to the overall success of this factory site. Hsiao believes that there is some overlap between the EV sector and the traditional automotive sector. Therefore, if they're going to rebuild the supply chain in the future, they will first consider the needed parts that the current supply chain is missing.
Hsiao pointed out that in the current production site, there's a large piece of forested land. To deal with the possible production and supply chain demand, Foxconn can develop it into a new production/assembly line or a campus for suppliers.
If a supply chain campus is to be planned there, Foxconn will handle all the issues, from infrastructure to certification, subsidiary applications, communication, coordination, and more, so as to lower the entry barrier for suppliers. All suppliers need to do is set up their production lines and personnel before they can begin production.
In addition, Hsiao also stated that, unlike traditional automotive makers which tend to sign exclusive production deals with suppliers, Foxconn's EV development plans won't restrict suppliers to exclusively supply Foxconn. Therefore, if suppliers set up their productions here, their client resume will not be limited to just Foxconn. It can also include other existing brands nearby like Honda and Stellantis.
However, Hsiao also emphasized that despite the market demand seeming quite large, the key factor is still the supplier's own competitiveness. After all, if it's a component already provided by a local supplier, and you cannot outperform it in terms of quality, price, and costs, there really is no point in coming all the way here.
Article translated by Jack Wu
