Foxconn

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Hon Hai Precision Industry Co., Ltd.
Trading name Foxconn
Type Public
Traded as TWSE: 2317
SEHK2038
LSEHHPD
Industry Electronics
Founded February 20th, 1974
Founders Terry Gou
Headquarters Tucheng District, New Taipei, Taiwan
Area served Global
Key people Terry Gou
(Chairman and President)
Products Electronics, electronic components
Services Electronics manufacturing services
Revenue Increase US$131.8 billion (2013)[1]
Operating income Increase US$3.64 billion (2013)[2]
Net income Increase US$3.55 billion (2013)[3]
Total assets Increase US$77.12 billion (2013)[4]
Total equity Increase US$26.87 billion (2013)[5]
Employees 1.23 million (2012)[6][dubious ]
Website foxconn.com
Foxconn
Traditional Chinese 鴻海精密工業股份有限公司
Simplified Chinese 鸿海精密工业股份有限公司
Literal meaning Hon Hai Precision Industry Co., Ltd.
Trading name
Traditional Chinese 富士康科技集團
Simplified Chinese 富士康科技集团
Literal meaning Foxconn Technology Group

Hon Hai Precision Industry Co., Ltd., trading as Foxconn Technology Group, is a Taiwanese multinational electronics contract manufacturing company headquartered in Tucheng, New Taipei, Taiwan. It is the world's largest electronics contractor manufacturer,[7] and the third-largest information technology company by revenue.[8]

Foxconn is primarily an original design manufacturer and its clients include major American, European, and Japanese electronics and information technology companies. Notable products that the company manufactures include the BlackBerry,[9] iPad,[10] iPhone,[11] Kindle,[12] Playstation 4, Xbox One, and Wii U.[13] It is the largest private employer in China.

Foxconn has been involved in several controversies relating to how it manages employees in China. There has been a history of suicides at its factories blamed on working conditions. In January 2012, about 150 Foxconn employees threatened to commit mass-suicide in protest of their working conditions.[14]

History[edit]

Foxconn connector box tag in 2014

Hon Hai Precision Industry Co., Ltd. was founded in 1974 by Terry Guo as a manufacturer of electrical components (notably electrical connectors for computer components,[11] which found use in the Atari 2600).[15] Foxconn was originally a trade name of Hon Hai and a subsidiary later received the name.[11] Hon Hai's first manufacturing plant in mainland China opened in Longhua, Shenzhen, in 1988.[11]

In 2001 Intel concentrated on its core competency of chip making and began using Chinese contract manufacturers such as Foxconn to make Intel-branded motherboards.[16]

In November 2007 Foxconn announced plans to build a new US$500 million plant in Huizhou, Southern China.[17]

In March 2012 Foxconn agreed to acquire a 10 percent stake in the Japanese electronics company Sharp Corporation for US$806 million and to purchase up to 50 percent of the LCD displays produced at Sharp's plant in Sakai, Japan.[18]

In January 2012 Foxconn named Tien Chong (Terry) Cheng chief executive, who soon resigned, citing health problems.[19]

In September 2012 Foxconn announced plans to invest US$494 million in the construction of five new factories in Itu, Brazil, creating 10,000 jobs.[20]

The company paid $312 million in 2014 for two 4G licenses in the lower 700 MHz and 900 MHz bands in Taiwan's Telco spectrum auction. In May 2014 Foxconn announced it was expanding its involvement in Taiwan's nascent 4G telecommunications market further by merging with Taiwan's fourth-largest mobile operator Asia Pacific Telecom. The deal was set to close on 20 June 2014.[21] In addition, FIH Mobile (a subsidiary of Hon Hai) became the largest shareholder of migme Limited, a social entertainment platform, through a $9.6 million investment that gave the Foxconn-linked handset company a 19.9% stake in the company.[22][23]

Operations[edit]

Foxconn has factories in Asia, Europe, Mexico and South America that together assemble around 40 percent of all consumer electronics products sold.[24]

China[edit]

Foxconn has 13 factories in nine Chinese cities—more than in any other country.[25]

Foxconn's largest factory worldwide is in Longhua, Shenzhen, where hundreds of thousands of workers (varying counts include 230,000,[24] 300,000,[26] and 450,000[27]) are employed at the Longhua Science & Technology Park, a walled campus[11] sometimes referred to as “Foxconn City”.[28] Covering about 1.16 square miles (3 square km),[29] it includes 15 factories,[28] worker dormitories, a swimming pool,[30] a fire brigade,[11] its own television network (Foxconn TV),[11] and a city centre with a grocery store, bank, restaurants, bookstore, and hospital.[11] While some workers live in surrounding towns and villages, others live and work inside the complex;[31] a quarter of the employees live in the dormitories, and many of them work up to 12 hours a day for 6 days each week.[24] Another of Foxconn's factory "cities" is Zhengzhou Technology Park in Zhengzhou, Henan province, where it is reported 120,000 employees work.[32]

Foxconn continues to expand, and planned factories include sites at Chengdu in Sichuan province and Wuhan in Hubei province.[25]

Brazil[edit]

All company facilities in South America are located in Brazil,[33] and these include mobile phone factories in Manaus and Indaiatuba as well as production bases in Jundiai, Sorocaba, and Santa Rita do Sapucaí.[34] The company is considering more investments in Brazil.[35]

Europe[edit]

A Foxconn factory in the Czech Republic

Foxconn has factories in Hungary,[36] Slovakia,[35] and the Czech Republic.[37] It is the second-largest exporter in the Czech Republic.[37]

India[edit]

Foxconn has operational units in the Special Economic Zone of Chennai, Tamil Nadu.[38]

Japan[edit]

Foxconn and Sharp Corporation jointly run two plants manufacturing large-screen televisions in Sakai, Osaka. In August 2012 it was reported that Sharp, while doing corporate restructuring and downsizing, was considering selling the plants to Foxconn, which was believed to be receptive to the plan.[39]

Malaysia[edit]

As of 2011, Foxconn had at least seven factories in Johor state,[40] possibly at Kulaijaya, where it is developing an industrial park that will include four factories once completed.[41]

Mexico[edit]

Foxconn has a facility in San Jerónimo, Chihuahua that assembles computers,[42] and two facilities in Juárez – a former Motorola production base that manufactures mobile phones,[43] and a set-top box factory acquired from Cisco Systems.[44] LCD televisions are also made in the country by Foxconn in a plant acquired from Sony.[45]

South Korea[edit]

The company invested $377 million in June 2014 to pick up a 4.9% shareholding in South Korean IT services provider SK CandC.[46]

United States[edit]

In December 2013, Foxconn announced plans to invest $30 million over two years to build a manufacturing facility in Pennsylvania, as well as putting $10 million into R&D at Carnegie Mellon University. The new facility will be located in Harrisburg and will develop robotic equipment.[47][48]

Major customers[edit]

Major customers of Foxconn include or have included:

(country of headquarters in parentheses)

Apple has stated that it contracts with Chinese original equipment manufacturers such as Foxconn because they have easy access to the Chinese supply chain[24] within a well developed industrial cluster.[62]

Controversies[edit]

Foxconn has been involved in several controversies all relating to employee grievances or treatment. Foxconn has more than a million employees.[63] In China, it employs more people than any other private company as of 2011.[35]

Working conditions[edit]

Allegations of poor working conditions have been made on several occasions.[64] News reports highlight the long working hours,[28][29] discrimination against mainland Chinese workers by their Taiwanese co-workers,[65] and lack of working relationships at the company.[66] Although Foxconn was found to be compliant in the majority of areas when Apple Inc. audited the maker of its iPods and iPhones in 2007[11] the audit did substantiate a few of the allegations.[67]

Concerns increased in early 2012 due to a US theatrical monologue purportedly based on factual accounts of working conditions at Foxconn,[68] but a portion of the source material was later found to be fictional.[69] However, a 2012 audit performed by the Fair Labor Association at the request of Apple Inc. found that workers routinely received insufficient overtime pay and suggested that workplace accidents may be common.[70][71]

A Hong Kong non-profit organisation, Students and Scholars Against Corporate Misbehavior, has written numerous negative reports on Foxconn's treatment of its employees.[72] These typically find far worse conditions than the 2012 Fair Labor Association audit did[citation needed] but rely on a far smaller number of employee informants–100 to 170.[73] The Fair Labor Association audit in 2012 used interviews with 35,000 Foxconn employees.[70]

In September 2012 a fight at worker dormitories in Taiyuan, Shanxi, escalated into a riot involving 2000 people and was quelled by security.[74][75]

In October 2012, the company admitted that 14-year-old children had worked for a short time at a facility in Yantai, Shandong Province.[76] Foxconn said that the workers involved were part of an internship program.[76] Individuals as young as 16 can legally work in China.[76]

Also in October 2012 a young worker, Zhang Tingzhen, was threatened to have Hon-Hal medical support canceled, when doctors remonstrated against moving his injured body for treatment in Huizhou from the hospital in Shenzhen.[clarification needed] He suffered an electrical shock and was injured to the extent that doctors needed to amputate half of his brain. This left him in no condition to travel to Huizhou, the city he was initially hired at. The company stated that it was acting within labor laws.[77][78][79][80]

Suicides[edit]

Main article: Foxconn suicides

Suicides among Foxconn workers have attracted media attention. One was the high-profile death of a worker after the loss of a prototype and the other, a series of suicides linked to low pay in 2010. Suicides of Foxconn workers continued into 2012, with one in June 2012.

Sun Danyong, a 25-year-old man, committed suicide in July 2009 after reporting the loss of an iPhone 4[81] prototype in his possession.[82]

In reaction to a spate of worker suicides in which 14 people died in 2010,[83] a report from 20 Chinese universities described Foxconn factories as labor camps and detailed widespread worker abuse and illegal overtime.[84] In response to the suicides, Foxconn installed suicide-prevention netting at some facilities,[64] and it promised to offer substantially higher wages at its Shenzhen production bases.[85] Workers were also forced to sign a legally binding document guaranteeing they and their descendants would not sue the company as a result of unexpected death, self-injury or suicide.[86]

Against this, the suicide rate at Foxconn, even during the suicide spate, was lower than that of China[87] as well as that of all 50 states of the United States.[88]

See also[edit]

References[edit]

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