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Foxconn mulls solar panels, sticking Apple where sun doesn't shine

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Apple iStuff maker Foxconn could start churning out solar panels at its Chinese factories, a spokesman for the manufacturing goliath revealed.

Perhaps worried that the sun could set on its long-running relationship with the iPad giant, the Taiwanese multinational will decide by the end of the year whether to move into the solar energy market.

Although building Apple gear accounts for perhaps 60 percent of Foxconn's business, the electronics giant wants to cut its reliance on the Cupertino idiot-tax operation.

Meanwhile, Apple is flirting with other manufacturers in the Far East, reportedly tapping up Pegatron to build a new cheaper version of the iPhone.

If Foxconn decides to try for its moment in the sun, it will enter the market just as solar panel prices are plunging – but global demand could be about to boom.

"We aim to make a decision about whether or not we will enter this market by the end of this year," Foxconn spokesman Simon Hsing told reporters. "We believe renewable energy is a potentially good trend. It looks like a good project. This is an industry we probably need to know more about."

China is the world's biggest manufacturer of solar panels, exporting $27bn (£18bn) of panels to Europe each year alone. In the past quarter, China exported a record-breaking number of solar photovoltaic modules - or solar panels, as we know them.

The country hopes to ship enough panels worldwide to produce 22 to 23GW of solar energy this year, a significant proportion of the total estimated global demand of 35 GW.

In China, Foxconn has a small solar panel factory in the east of the Asian nation, and has held talks with officials in the southern province of Guangxi about building fields of solar panels. In March, the Commerce Ministry of Guangxi said it was in discussions with Foxconn bosses about the construction of five solar panel factories and 20 solar power plants.

Follow the money ... to Fukushima

Foxconn's decision is likely to hinge upon a few key factors. Firstly, its shift to solar will depend on whether Japan keeps on buying solar panels at the same rate. The Japanese are moving away from nuclear power in the wake of the Fukushima incident, using solar power to fill the gaps and allay a population spooked by the dangers of atomic energy.

Foxconn's plans will also depend on demand in America, which introduced steep duties on made-in-China solar panels, sparking fears of a trade war. Nonetheless, despite warnings that importing cheap Chinese panels was hurting homegrown manufacturers, Americans bought up $3.1bn worth of solar cells and panels from the People's Republic in 2012, up from $640m in the previous year.

However, Europe and China have managed to reach an agreement that has set a minimum price for solar panels. Brussels said the "amicable solution" would prevent China "dumping", which means selling hardware especially cheap to ensure a dominant market position.

Prices for solar panels are now so low, folks are snapping them up without the need for government subsidies, the bank UBS claimed in a research note at the end of last week.

“Purely based on economics, we believe almost every family home and every commercial rooftop in Germany, Italy and Spain should be equipped with a solar system by the end of this decade,” the memo stated.

If this massive shift away from traditional forms of energy - such as coal, gas and nuclear - actually happens, Foxconn would be well placed to seize upon it.

With a, er, dedicated and hardworking workforce of more than a million in China alone and plans to replace most of them with robots, Foxconn also knows something about keeping costs down. ®

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