Apple's long time manufacturing partner Foxconn is expanding into Brazil with a $12 billion investment to setup facilities for producing iPhones and iPads. The first Brazilian-made iPads were originally expected to ship by December, but the process has hit a snag as negotiations between Foxconn and Brazilian officials have turned sour.
According to Reuters, Brazilian government officials say that Foxconn's plans to produce iPads in Brazil is "in doubt." They claim that negotiations have stalled because the Taiwanese manufacturer is making "crazy demands" for tax breaks and other special treatment. Combined with other problems with manufacturing in Brazil, including a lack of skilled labor, high taxes, and an overvalued currency, the prospects of a Brazilian iPad seem even less likely.
The initiative to move iPad production to Brazil was first announced back in April and set to begin in July. But since then, Foxconn's Brazilian iPad production has been pushed back to November with the latest reports pointing to a December shipment. It's not been clear whether these iPads would be the current generation tablets or the rumored iPad 3s, but now the whole project may get canned altogether.
Foxconn's proposal is a complex one that involves constructing a new industrial city outside of Sao Paulo. This "intelligent city" would require plenty of new infrastructure, including its own energy facility and roads. The government requires such projects to have Brazilian partners, but the country's technology sector doesn't have the investment power to support such an ambitious project. In order to move forward, everything will likely be scaled back.