Foxconn ready to move production out of China if necessary
Taiwanese manufacturer seeks to reassure companies worried about US-China trade war
Foxconn has told companies worried about the trade war between Beijing and Washington that it can move electronics production for the US market out of China at short notice, adding that production will begin at its new Wisconsin plant by the end of next year.
The company said 25 per cent of its total capacity is now outside of China, and Liu Young-way, a member of the company’s newly formed top management committee, said it could help Apple, for example, move iPhone production out of China if necessary. But he noted that Apple had not yet asked for a shift.
The situation for the global economy and the industry “looks bleaker and bleaker, and the situation is unpredictable”, said Mr Liu.
Foxconn will start mass production of displays, car electronics and servers for the US market at its new plant in Wisconsin by the end of next year, Mr Liu said, and plans to invest $1.5bn and employ up to 2,000 people by the end of 2020.
At the first investor conference Foxconn hosted in its 45-year history, the world’s largest electronics manufacturer and largest assembler of Apple’s iPhone presented a new management structure designed to deal with the exit of Terry Gou, its founder, from day-to-day business as he runs for president of Taiwan.
Mr Gou is expected to resign from the post of chairman at the group’s annual general meeting on June 22, and be replaced by one of four new members of the board to be elected at the AGM.
Apart from Mr Liu, the head of the group’s semiconductor business, the new board members include Jay Lee, deputy chairman of Foxconn’s industrial internet unit, Lu Sung-ching, head of the company’s connector unit, and Tai Cheng-wu, chairman of Sharp, the Japanese technology company Foxconn acquired in 2016.
Mr Liu, who moderated the investor meeting and gave the main speech, said the new body was a formalisation of frequent meetings Mr Gou had held with the heads of group units and marked the transition to professional managers running the company.
Since the four board members who have a seat on the management committee will have a majority on the board of directors, the new committee can, in principle, vote through any decisions made by the new committee.
Senior executives made clear, however, that Mr Gou will continue to play a key role. Mr Liu said the company founder would retain a seat on the board.
“His future role [in the company] will depend on how the presidential campaign goes,” Mr Liu said, leaving open the possibility of Mr Gou’s return to a top role if he does not win the presidential election in January.
Addressing the slump in global demand for smartphones, the devices which have driven growth in the electronics hardware market for several years, Foxconn said it would focus on 5G, automotive electronics, the industrial internet of things, medical applications and semiconductors.
Management said the company expected to spend about NT$30bn to NT$50bn (US$955m to US$1.5bn) a year in capital expenditure, but these investments would be channelled more into developing technological capabilities required in these new fields.