Foxconn Success Story: The World's Largest Electronics Manufacturer

Foxconn Success Story

Foxconn, or Hon Hai Precision Industry Co Ltd, is the biggest global electronics manufacturing company. Based in Tucheng, Taiwan, Foxconn is the name that manufactures electronics items for many well-known American, Chinese, Canadian, and Japanese companies. Popular products manufactured by Foxconn included iPad, iPod, Kindle, BlackBerry, Nokia devices, Sony devices, and even Apple's iPhone. Of late, Foxconn has also ventured into the auto manufacturing industry. Let's explore more about this electronics manufacturing giant.

Foxconn - Company Highlights

Startup Name-Foxconn Technology Group
Also Known As-Hon Hai Precision Industry Co. Ltd.
Headquarters-Tucheng District, New Taipei, Taiwan
Industry-Electronics
Products-Electronics, electronic components, PCBs, PCB components, computer chips.
Founders-Terry Gou
Founded-20 February 1974
Chairman-Young Liu
Website-www.foxconn.com

Foxconn - About

Foxconn Technology is a Taiwanese multinational electronics contract manufacturer that specializes in the manufacturing of computer, communications, and consumer electronics goods. In 2010, Foxconn was the world's largest electronics manufacturing service provider and the third-largest technology company in terms of revenue.

Foxconn manufactures a wide range of products. Metal shells, structural components, thermal modules, gaming console assembly goods, Desktop computers, notebook computers, tablet computers, servers, mobile phones, projectors, e-book readers, digital cameras, and workstation radiators are some products that Foxconn produces for its clients. The company's goods are mostly distributed in China, the United States, and Japan.

Other countries where the business has built R&D and production facilities include China, India, Japan, Vietnam, Malaysia, the Czech Republic, the United States, and others. The firm has over 83,500 patents and focuses on research and development.

Foxconn is committed to supporting environmental sustainability in the manufacturing process and serving as a best-practices model for global organizations, in addition to optimizing value creation for clients.

Over the years, Foxconn Group has expanded not only its capabilities into the development of electric vehicles, digital health, and robotics, but also three key technologies – AI, semiconductors, and next-generation communications technology – by leveraging its expertise in Cloud Computing, Mobile Devices, IoT, Big Data, AI, Smart Networks, and Robotics/Automation.

Foxconn - Latest News

January 10, 2022 - Foxconn announced to reopen its Sriperumbudur factory in Tamil Nadu on January 12, 2022, as per the statement of Sriperumbudur MLA, K Selvaperunthagai to the assembly.

In August 2021, Stellantis, a global automaker, and Foxconn announced a joint venture to develop a "smart cockpit" for automobiles that would include navigation, voice help, and payment services. The joint venture between Foxconn and Stellantis, called 'Mobile Drive' will make the smart cockpits available to other carmakers.

"Its roadmap of software innovations will include artificial intelligence-based applications, navigation, voice assistance, e-commerce store operations, and payment services integration, amongst others," the companies said in a joint statement.

Foxconn - Founder and CEO

Hon Hai Precision Industry Co., Ltd. or Foxconn was founded by Terry Gou in 1974 as an electrical component maker. Terry Gou

Terry Gou is the founder and CEO of Foxconn. Born on 18th October 1950, Terry Gou is a Taiwanese billionaire businessman. After graduation, Gou worked with several factories before founding Hon Hai (Foxconn's parent company) in 1974 in Taiwan. Hon Hai started as a plastic part manufacturer for television, with just 10 elderly workers

Today, Foxconn is the world's biggest contract electronics manufacturer, employing 1.2 million people in mainland China, and serving as China's largest private employer and exporter. It has plants in various countries, the majority of which are located in mainland China.

Foxconn - Startup Story

Terry Gou founded Hon Hai (Foxconn) in Taiwan in 1974 with $7,500 in seed money and 10 older labourers, working out of a leased shed in Tucheng, a Taipei suburb, producing plastic parts for television sets. In 1980, he received an order from Atari to create the console joystick, which marked a turning point in his career.

In the 1980s, he extended his firm even further by going on an 11-month road tour across the United States in pursuit of new clients. Despite having security called on him numerous times, Gou was able to break into many organizations uninvited and obtain further orders as an aggressive salesperson.

He built his first plant in mainland China, in Shenzhen, in 1988, and it is still his largest factory today. When Gou vertically integrated the assembly process and work facilities in China, operations grew dramatically. The factory site was transformed into a campus including accommodation, dining, medical care, burial for the workers, and poultry raising to supply the restaurant.

Hon Hai began producing Compaq desktop chassis in 1996. This was a watershed moment, and it led to the development of bare-bones chassis for other high-profile clients including HP, IBM, and Apple. Foxconn evolved to become a consumer electronics behemoth in just a few years.

Foxconn - Mission and Vision

Foxconn's vision statement says, "Creating comprehensive smart living experiences for our customers across the globe."

Foxconn's mission statement says, "To ensure all employees to take active roles in meeting company’s global targets, by decomposing them into departmentally distributed realistic targets/ To ensure a reliable organization and discipline where all employees will be glad to be a part in/ To act continuously on increasing the turnover by considering the principle of “Win-Win”/ To ensure the use of all resources effectively and efficiently/ To create a clean, healthy and safe production and work environment which respects to human and considers the next generations."

Foxconn - Business Model and Revenue Model
Mass Manufacturing

Foxconn serves as a component supplier to several OEMs. It focuses on the mass manufacture of specialized parts for electrical goods in this section. It may reach huge economies of scale by focusing on certain components, making total manufacturing cheaper.

Contract Manufacturer

Foxconn also serves as a contract manufacturer for corporations like Apple. This enables Apple to mass-produce its goods using Foxconn's massive manufacturing facilities and low-cost facilities. By providing contract manufacturing, Foxconn helps its clients to avoid the high costs of constructing their own production facilities.

Low-Cost Manufacturing Provider

When acting as a contract manufacturer, Foxconn provides clients with fully integrated solutions that encompass the whole production process. In this way, it reduces production costs per unit by leveraging its low-cost manufacturing knowledge and the scale of its manufacturing facilities. It can manufacture items for its clients, such as the Apple iPhone, for less than Apple could produce it directly, thanks to its whole service offering.

Whitelabel Manufacturing

In addition to private label manufacture, which Foxconn conducts for Apple through contract manufacturing, it also provides white-label items. These are usually not branded with Foxconn's logo, but rather with the distributor's, and sold to a variety of distributors. Because the underlying technology is identical, this enables these generally low-priced electronic items to be made on a larger scale and hence at a cheaper cost than if they were produced by a single distributor.

Foxconn - Employees

Alan Yeung - Director US Strategic Initiatives
Fang Ming Lu - GM Asia-Pacific Region & Board of Directors (Hon Hai
Precision Industry Co. Ltd)
Min Chih Chuo - Corporate Supervisor
Louis Woo - Executive
Daniel Ying-Tso Lai - Senior Deputy Manager
Aymar de Lencquesaing - Vice Chairman
Jack Lee - Founding Partner, Executive Director

Foxconn - Challenges Faced

Foxconn's labour policies were being scrutinized again and again. According to an investigation by China Labor Watch, a New York-based labour advocacy group, and The Observer, a British newspaper, a Foxconn facility in Hengyang, China, breached labour regulations. Amazon's Echo smart speakers and Kindle devices are made at this facility.

Foxconn said that it was “carrying out a full investigation of the areas raised by that report.” The company added that it “works hard to comply with all relevant laws and regulations” in the markets where it operates and that “if infractions are identified, we work to immediately rectify them.”

Here's an overview of some of the problems allegedly plaguing Foxconn's factories:

Suicides are a common occurrence - In 2010, the firm was rocked by a wave of employee suicides. Since then, there have been further occurrences.

The exploitation of wages and working hours - Foxconn was accused in 2012 of underpaying its workers and forcing them to work long hours. As a result, the firm has promised to shorten shifts and boost salaries.

Serious Accidents - An electric shock in 2011 left one Foxconn employee with neurological damage. In the same year, an explosion in a factory killed four people and wounded another 18.

Workers under the age of 18 and those working illegally - In 2012, Foxconn acknowledged employing minors as young as 14 at one of its facilities. Late this year, Apple acknowledged that student employees were found working overtime at a factory where the iPhone X is produced, in contravention of local rules.

Riots are a common occurrence -. In 2012, a major riot involving over 1,000 workers occurred at one of the company's plants.

Poor living conditions - In 2012, the New York Times stated that three-room staff flats could house up to 20 workers.

For its part, Foxconn has attempted to solve problems as they arise, making its workplaces safer and raising compensation to boost morale.

Foxconn - Growth

Foxconn forecasted a 10% increase in revenue in 2021, owing to "stronger than projected" sales of smartphones, particularly the new iPhone 12, and telecommuting gadgets, as a result of the coronavirus-induced work-from-home trend. Foxconn's stock has climbed by about 41% this year(2021).

Foxconn reported NT$5.35 trillion in revenue in 2020, which is around $192 billion in U.S. dollars. Since its inception, the firm has earned several worldwide honours and recognition. In the Fortune Global 500 rankings for 2020, the firm was placed 26th and 25th in the Top 100 Digital Companies in the Forbes list of the World's Best Employers for 2019.

Foxconn - Competitors

Jabil, Toshiba, NN LABS, TDK, and Celestica are among Foxconn's competitors.

Foxconn - Awards and Achievements

Recent awards and achievements of Foxconn:-

2017 - Shortlisted in Forbes World's Best Employers, Announced Key Strategic Tenets of Cloud Computing, Mobile Terminals, Internet of Things (IoT), Big Data, Artificial Intelligence (AI), High-Speed Networks, and Robots, Foxconn Interconnect Technology listed on the Hong Kong Stock Exchange, U.S. Flying Eagle Program launched
2018 - Clarivate Top 100 Global Innovators – awarded in 4 consecutive years – only Taiwan’s private enterprise on the list, Foxconn Czech Republic Ranked 2nd in the Czech Republic Top 100 Companies, Foxconn Industrial Internet (Fii) listed on A shares in the Shanghai Stock Exchange.
2019 - Ranked 25th among Forbes Top 100 Digital Companies.
2020 - Ranked 26th among Fortune Global 500 rankings.

Foxconn - Future Plans

Hon Hai Precision Industry Co. has announced intentions to develop its embryonic cars sector to counteract decreasing growth in its main consumer electronics assembly industry. Foxconn however has no plans to sell these vehicles under its own brand but will manufacture them for other car brands.

The firm unveiled its first electric vehicle chassis as well as a software platform geared at assisting EV manufacturers in bringing models to market more quickly. The business also stated that by 2024, it intends to develop a solid-state battery that may replace lithium-ion batteries in electric vehicles.

As told by Foxconn Chairman Young Liu, the business is aiming for a 10% share of the EV market by 2025, with roughly 3 million vehicles utilizing its platform.

Hon Hai said earlier this year that it will form a joint venture in China with Fiat Chrysler Automobiles NV to develop and manufacture electric vehicles. It's also forming an electric car design cooperation with the Yulon group's Hua-Chuang Automobile Information Technical Center. Tesla Inc. presently receives certain components from the Taiwanese firm.

By 2025, the company hopes to increase its gross margin to 10% through automotive and other new operations.

Foxconn - FAQs

Who owns Foxconn?

Foxconn was founded by Terry Gou. He is the Chairman and Chief Executive Officer of Foxconn.

What does Foxconn do?

Foxconn Technology is a Taiwanese multinational electronics contract manufacturer that specializes in computer, communications, and consumer electronics goods. Metal shells, structural components, thermal modules, and gaming console assembly goods are all available from the company.