Investment Monitor

Weekly Newsletter

11 August 2023

Weekly Newsletter

Hanon Systems to open $170m factory in Tennessee

South Korea's Hanon Systems has announced its fourth factory in Loudon County, Tennessee, creating 600 jobs.

Hanon Systems, a South Korea-based automotive thermal and energy management solutions supplier, has announced plans to invest $170m (Won222.19bn) to open its fourth factory in Loudon County in the US state of Tennessee. The new facility aims to supply its thermal products to automakers throughout North America. The project will create 600 jobs.

Of the project, Tennessee governor Bill Lee said: "Tennessee is at the centre of the automotive industry, and Hanon Systems’ decision to invest nearly $170m in Loudon County is a testament to Tennessee’s unmatched business climate, thriving economy and highly skilled workforce. I thank Hanon Systems for creating 600 new jobs that will create tremendous opportunity for Tennesseans across the region."

Hanon Systems was formed in 1986 as a traditional automotive climate supplier but is now a full-line thermal and energy management solutions provider. It has global operations spanning Brazil, Bulgaria, Canada, China, Czech Republic, France, Germany, Hungary, India, Italy, Japan, Mexico, the Netherlands, Portugal, Slovakia, South Africa, South Korea, Thailand, Türkiye, the UK and the US.

Loudon County is located in the east of Tennessee and has a population of just over 50,000. In July, Magna International announced that it would invest $790m in three Tennessee facilities, while other recent investments into the state have come from Tritium and Kordsa.

Generative AI expected to drive significant disruption across the financial services industry

Per latest GlobalData estimates, the AI market was valued at $81 billion in 2022, and is expected to achieve a CAGR of more than 35% between 2022 and 2030. Artificial intelligence is reported by executives across all industries (and all FS sub-segments), as likely to drive “significant disruption” next 12-24 months out, and that “significant disruption” has already occurred (within the past 12-24 months). Gen AI, a specific sub-set of AI, is expected to drive even greater disruption. Gen AI is being experimented with by many leading incumbent banks, new entrants and technology vendors but concerns around data privacy and hallucinations drive caution. More human-like chat bots, and synthetic data for fraud and cyber resilience, are leading possible use cases. However, currently Gen AI is virtually non-existent in terms of “live” customer facing propositions. Chatbots, perhaps the most compelling near-term use case, remain completely untouched by even the pioneers in the field. While the benefits are clear long-term, short-term the risks are even clearer, whether that’s inaccurate guidance or advice in a heavily regulated arena, data leakage, fraud and cyber vulnerabilities, and so on. As such, risk management features prominently in the calculations. However, the fear of missing out is palpable. Incumbents need clear policies to help identify those most promising, early Gen AI use cases, then rapidly deploy them across the enterprise.