Taiwanese manufacturers Foxconn are in talks with the Saudi Arabian government about jointly building a A$12.5 billion factory in the country, in order to handle its growing orders for electronics displays, semiconductors, EV components, and other parts.

According to the WSJ, the factory will be the cornerstone of Neom, a technology hub city being built in the Saudi Arabian desert. Foxconn is also talking with the United Arab Emirates about building a similar factory there.

With the ongoing issues between China and the US, Foxconn is looking to rely less on its Chinese manufacturing hubs, where the majority of Apple’s iPhones are created, along with an estimated 40 per cent of the world’s electronics gear.

The Saudi government is looking for Foxconn to move at least two-thirds of its production to the factory, while Foxconn is seeking financing, tax breaks, and power and water subsidies.

Crown Prince Mohammed bin Salman is looking to move the country’s economy away from oil, and towards supply-chain components, so this deal may benefit both parties.