Foxconn isa company that deals with a large number ofconsumer electronic products, from the Xboxconsolem the iPad and even iPhoneJt is also considered one of the largest electronic companies in the world. I am choosing this company to research, as it is a widely known company, yet has an interesting history and political profile, Foxconn is a manufacturer and distributor of electronichts main headquarters is found in the Tucheng District in Taiwan. In this profile, I am going to talk about the development of Foxconn, from its beginnings in the 19705 to the success of the present day. This will be through an examination of its corporate history and structure, together with aneconomic profile,focusing on the many partnerships and investments the company has made in order to diversify its interests. Foxconn was founded in 1974, by Terry Gout His main goal for creating the company was to lower the prices of electronics so that consumers around the world could afford them initially, foxconn was created as Hon Hai Precision Industry and the company only dealt with the supply of electronic products to manufacturers.
The company’s first factory was in China. It opened in 1988 in a town called Longhua, located in Shenzhen Foxconn grew rapidly in the electronics field,proving more successful than many of its rivals due to the quality of its manufactured products and the low cost of creating them.A major turning point for Foxconn occurred in 2001, when it replaced Asus as the primary contractor for producing motherboards for Intel Apple is also a primary contractor of Foxconn, until the iPhone maker reduced the amount of outsourcing given to Foxconn. Recently the companyfinalized a deal to manufacture LCD screens,which has allowed Foxconntoexpand its customer market base. This move highlights the organizations effort to diversify. Another example of this isLhe deal it acquiredwith Asia Pacific Telecom in 2014.
The company‘s evolution started from humble beginnings. Gou had just $7500 in the bank when the business was co-founded. One reason for its success is the management style. At Foxconn, the type of management used is similar to that used in army training. This type of management is explained by Hu Xingdou, a professor at Beijing Institute of Technology. Hestatesthat it isa suicidal type of management, where workers are encouraged to work ten straight hours while standing Foxconn seized upon the benefits of having its manufacturing basein China.1ts growth in the world market made Foxconn the country’s largest exporter and manufacturer of electronics. In 2008, Foxconn experienced double-digit growth,expanding its shareof the market. Analysts dubbed this the ”Foxconn effect” and attributed the expansion to the company’s lowerproduction costsrelative to other electronics manufacturers.
While many of its competitors struggled to make profits or dealtwith deficits, Foxconn increased its profits by more than 35%.Most of thiscame through cost cutting; revenues were relatively flat,yet net income in 2088 grew from $17 billion to $23 billion In order to maintain this level of growth and evolution, Foxconn hasutilized large numbers of migrant workers. These are people who relocated to work at Foxconn manufacturing plants despite other organizations in Shenzhen no longer employing, them 0r even facing closure. According to one 21—year—old worker, Foxconn gave migrant workersconfidence,despite the fact that other factories were in financial crisis, with some not even able pay their workers foxconn hired workers at the time, and attracted a huge number of applications for jobs, particularly in the field of electronic assembly.
Foxconn has grown from an employer ofjust a few workers to their current base of employingaround 1.3 million workersglobally. This includes 900,000 people at the main headquarters and approximately450,000 working in Shenzhen, where the company has two plants located. As a result of the organization’s army-like mode of operation, 13 different suicidal attempts by its workers have been recorded, resulting in to 10 deathsi. These practices were called into question when a 19-year—old worker jumped from a building and died at a Foxconn factory located in the Langfang Hebei province. Softbank and Foxconn have agreed to operate in a joint venture that will increase theirpositionas Asia’s biggest electronics company. This move will give Foxconn a 54% stake inSoftbank, with an existing $600 million subsidiary that operatesas a dual group investment to increase their market share in the electronic and technology sector.
Currently the partnership is considering an expansion of their customer base in the United States. As a joint venture between these two companies, a subsidiary of Foxconn will automatically buy shares of Softbank to obtain a controlling stake. Foxconn also has anotherjoint venture in operation The company is looking to build a LCD manufacturing plant in China,at a cost of $8.8 billion, in cooperation with the Sharp Corporation. Thegoal of this dual venture is to increase the production of large screen televisions to meet anexpected rise in thedemand of these commodities Due to the growth in competition of electronic device manufacture, Foxconn is looking to expand its services into the health industry By partnering with Sotera, a firm located in San Diego, it hopes to provide wireless medical devices that are worn on the body, These devices are used to monitor vital health signs together with blood pressure.
This deal has made Foxconn both a supplier of sensors and batteries, and also the exclusive sale agent in China. Foxconn also has deals in place with other companies in the health sectort They have partnered with Varian as a distributor for radiation treatments in China, Additionally, Foxconn has invested $5 million in Soundhwak, a company that makes hearing devices. Foxconn is expanding its customer base in the healthcare sector due toan increase in the demand for mobile oriented and wireless devices, where Foxconn has a depth of experience in manufacturing such devices. The Foxconn production line has necessarily evolved to cope with the increase in the demand of its products, panicularly at its Chinese factories, where a high level of automation is utilized. The companymanufactures its own robots and hasinstalled around 40,000 units in their factories. The eventual aim is to automate the entire factory process, with only a small number of employees required these people will be deployed in logistics, inspection, product testing and production processes. These plans have caused great concern, not least among politicians and global figureheads. US President Donald Trump statedan intention to levy penalties onto goods made abroad using these types of automated, low cost production lines. It is thought that this automatization could lead to millions of people losing theirjobs around the world, as reported by the World Economic Forum.
Finally, in partnershipwith Softbank, Foxconn plans to invest $50 billion in the US technology sector, creating around 50,000 jobs. It is believed that this initiativewas influenced byPresidentTrumpt. His goal was to encourageApple (who outsource certain manufacturing to Foxconn) to bring the manufacture of itsproducts back into the country, therebycreating more jobs. Most of the assembly production is currently held in China. Bill Tsai, an analyst at Mega Investment Service, stated that moving a production industry from one place to another is a complicated and difficult task. For example, there is a need to find a labor and building supply chain. He maintains that the cost of production per unit will increase by $10 if production is moved from China to USJ-lowever, Foxconn finally reached an agreement with Apple that it will expand its production industries in the US.