UPDATE 1-Foxconn to spend billions on new China plant - sources

Fri Oct 15, 2010 8:26am EDT

* Could invest as much as $10 bln, but no timeframe -source

* LCD plant to be upgraded to use 8.5G technology -source

* Plant will initially employ 20,000 people - source

(Adds details)

BEIJING/HONG KONG, Oct 15 (Reuters) - Taiwan's Foxconn Technology Group, whose units include Hon Hai (2317.TW) and Foxconn International (2038.HK), will build a new plant in the Chinese city of Chengdu, company and government sources said on Friday.

A key supplier to top technology brands such as Hewlett-Packard (HPQ.N) and Apple (AAPL.O), Foxconn could invest as much as $10 billion in the plant, said one source, but did not specify an investment timeframe.

The sources declined to be identified because the details had not yet been made public.

Foxconn spokesman Edmund Ding was not immediately available for comment.

The factory will initially employ at least 20,000 workers, with half of those already having received training in Foxconn's existing hub in the southern city of Shenzhen, the source added.

Foxconn's LCD panel arm Chimei Innolux (3481.TW) already owns a plant in the city and is awaiting approval from the government to build a more advanced plant based on 8.5-generation technology that will enable it to make larger panels, a second source said.

Foxconn Chairman Terry Gou is likely to announce the plans when he visits Chengdu next week, the first source said.

Foxconn is expanding away from Shenzhen, which is in the Pearl River Delta area, to where wages are lower and workers more plentiful.

Most top technology brands typically do their own design work but outsource labour-intensive manufacturing to the likes of Hon Hai and Singapore-based Flextronics (FLEX.O). (Reporting by Zhou Xin in Beijing and Kelvin Soh in Hong Kong; Editing by David Holmes)