Foxconn's new plant in Dongguan, Guangdong Province, hasn't started operations as scheduled. [File photo]

Foxconn's new plant in Dongguan, Guangdong Province, hasn't started operations as scheduled, leaving the project up in the air, a local government official said.

In January, Foxconn signed an agreement with Huangjiang Town in Dongguan for a 100,000-square-meter factory to produce components of small- and mid-sized touch screens and flat panels for export.

Foxconn hasn't commented on the delay, but industry insiders and analyst said shrinking demand in foreign markets is a likely factor in the firm's decision-making.

The project would cost Foxconn US$100 million, with an investment of US$25 million, the local government said.

According to the plan, the plant was supposed to begin production in March and expected to generate revenue of US$100 million this year.

"The plant is set up to manufacture products for the overseas market," said a former employee at an area Foxconn plant. "The tablet market has cooled down as tablet devices are losing their luster and the Eurozone debt crisis is taking a toll on consumption."

Foxconn declined to comment on the plant.

China's business press carried the story above on Thursday.