Massive Asian tech companies Foxconn and SoftBank looking to US for expansion
Foxconn and SoftBank, two of Asia’s biggest technology companies, have said they want to expand investment in the US as President-elect Donald Trump pledges to bring manufacturing jobs back to the country.
The head of Japan’s SoftBank, Masayoshi Son, has pledged a $50bn (£40bn) investment in the US while Foxconn, a major supplier for Apple, is in preliminary discussions to expand its US operations.
SoftBank has been on a western expansion drive this year and recently bought the UK’s ARM Holdings in a £24bn deal.
Son said his investment would create 50,000 new jobs and has already met with Trump to discuss the plans.
The investment pledge revived speculation that US telecoms giant Sprint, which is 82 per cent owned by SoftBank, might rekindle merger talks with T-Mobile that died under pressure from US regulators.
The lack of details on the investment timetable also prompted doubts on whether the promise of money and jobs will be met, as Sprint is slashing staff numbers to cut more than $2bn in costs this fiscal year.
Trump’s moves since the election to engage with individual companies – while turning his back on broader, years-in-the-works trade deals – show that he is leaning on the deal-making skills he honed in the boardroom.
Trump campaigned against the over-regulation of business and is expected to be more open to mergers than President Barack Obama.
The $50bn investment, announced jointly by Trump and Son in the lobby of the Trump Tower (pictured) in Manhattan, would come from the $100bn tech investment fund the head of SoftBank is setting up with Saudi Arabia’s sovereign-wealth fund and other potential partners, according to the Wall Street Journal.
“Ladies and gentlemen, this is Masa from SoftBank of Japan, and he’s just agreed to invest $50 billion in the United States and 50,000 jobs,” Trump said.
“He would never do this had we (Trump) not won the election!” Trump later Tweeted.
Son, who wore a red tie and red sweater under his suit jacket, told reporters his company, a $68bn telecommunications and tech investment behemoth, would create jobs by investing in startup companies.
He also said he expected a lot of “deregulation” under a Trump administration.
Trump and Son did not give a timeline for the investment. Trump’s four-year term will begin after his inauguration on 20 January 2017.
Son’s business partner Foxconn issued a brief statement after a report by broadcaster CNBC, showing a snapshot of a page held by Son outlining the investment carrying the logos of SoftBank and the Taiwanese firm.
“While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant US officials,” the Foxconn statement said.
Meanwhile, the US Supreme Court sided with Samsung this week in a big-money smartphone patent fight with Apple, throwing out an appeals court ruling that the South Korean company had to pay a $399m penalty to its American rival for copying key iPhone designs.
The 8-0 ruling, written by Justice Sonia Sotomayor, held that a patent violator does not always have to fork over its entire profits from the sales of products using stolen designs, if the designs covered only certain components and not the whole thing.
The justices sent the case back to the US Court of Appeals for the Federal Circuit in Washington to determine how much Samsung must pay. Yet they did not provide a road map to juries and lower courts on how to navigate similar disputes in the future.
Apple spokesman Josh Rosenstock said in a statement that the US company remained “optimistic that the lower courts will again send a powerful signal that stealing isn’t right.”
Samsung said the ruling was a “victory for Samsung and for all those who promote creativity, innovation and fair competition in the marketplace.”