Foxconn

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Hon Hai Precision Industry Co. Ltd.
鴻海科技集團
Foxconn Technology Group 富士康
Public
Traded as TWSE: 2317
ISIN TW0002317005
Industry Electronics
Founded February 20, 1974; 43 years ago (1974-02-20) (as Hon Hai Precision Industry Co., Ltd.)
Founder Terry Gou
Headquarters Tucheng District, New Taipei, Taiwan
Area served
Worldwide
Key people
Terry Gou
(Chairman and President)
Products Electronics, electronic components, PCBs, PCB components, computer chips.
Services Electronics manufacturing services
Revenue Increase US$136.12 billion (2015)[1]
Increase US$4.988 billion (2015)[1]
Increase US$4.460 billion (2015)[1]
Total assets Increase US$70.10 billion (2015)[1]
Total equity Increase US$30.60 billion (2015)[1]
Number of employees
1.3 million (2015)[2]
Subsidiaries Sharp Corporation
Smart Technologies
FIH Mobile Ltd.
Website www.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. Foxconn is the world's largest contract electronics manufacturer [3] and the fourth-largest information technology company by revenue.[4] The company is the largest private employer in China[5] and one of the largest employers worldwide.[6][7] Its founder and chairman is Terry Gou.

Foxconn is primarily a contract manufacturer; clients include major American, Canadian, Chinese, Finnish, and Japanese electronics and information technology companies. Notable customers and products the company manufactures for include BlackBerry,[8] iPad,[9] iPhone, iPod,[10] Kindle,[11] Nintendo 3DS, Nokia, PlayStation 3, PlayStation 4, Wii U, and Xbox One.[12]

Foxconn has been involved in several controversies, including a spate of suicides in 2010 at its Chinese factories, blamed on its treatment of employees and working conditions.

History[edit]

Foxconn connector box tag in 2014

Hon Hai Precision Industry Co., Ltd. was founded in 1974 by Terry Gou as a manufacturer of electrical components (notably electrical connectors for computer components,[10] which found use in the Atari 2600).[13] Foxconn was originally a trade name of Hon Hai, and a subsidiary later received the name.[10] Hon Hai's first manufacturing plant in mainland China opened in Longhua Town, Shenzhen, in 1988.[10]

In 2001, Intel switched its manufacture of Intel-branded motherboards from Asus to Foxconn.[14]

In November 2007, Foxconn announced plans to build a new US$500 million plant in Huizhou, Southern China.[15]

In January 2012, Foxconn named Tien Chong (Terry) Cheng chief executive;[16] he soon resigned, citing health problems.[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 LCDs produced at Sharp's plant in Sakai, Japan.[18]

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.[19]

In 2014, the company purchased Asia Pacific Telecom, as well as winning at auction some spectrum licenses which allowed it to operate 4G telecommunications equipment in Taiwan.[20]

On February 25, 2016, Sharp accepted the ¥700 billion (US$6.24 billion) takeover bid from Foxconn that acquires over 66 percent of Sharp's voting stock.[21] However, hours later the deal was put on hold after "contingent liabilities... worth perhaps billions of dollars...came to light."[22] A joint press statement released on 30 March 2016 finalised the deal but at a price significantly lower than a month earlier.[23]

In 2016, Foxconn, together with Tencent and luxury-car dealer Harmony New Energy Auto founded Future Mobility, a car startup that aims to sell all-electric fully autonomous premium cars in 2020.[24]

International Operations[edit]

Foxconn has factories in Asia, Brazil, Europe, and Mexico that, as of 2012, comprise approximately 40 percent of all consumer electronics products sold.[25]

Mainland China[edit]

Foxconn has 12 factories in nine Chinese cities—more than in any other country.[26]

Foxconn's largest factory worldwide is in Longhua Town, Shenzhen, where hundreds of thousands of workers (varying counts include 230,000,[25] 300,000,[27] and 450,000[28]) are employed at the Longhua Science & Technology Park, a walled campus[10] sometimes referred to as “Foxconn City”.[29] Covering about 1.16 square miles (3 square km),[30] it includes 15 factories,[29] worker dormitories, 4 swimming pools,[31] a fire brigade,[10] its own television network (Foxconn TV),[10] and a city centre with a grocery store, bank, restaurants, bookstore, and hospital.[10] While some workers live in surrounding towns and villages, others live and work inside the complex;[32] 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.[25]

Another of Foxconn's factory "cities" is Zhengzhou Technology Park in Zhengzhou, Henan province, where a reported 120,000 workers are employed as of 2012.[33]

Foxconn continues to expand, and planned factories include sites at Wuhan in Hubei province, Haizhow, Kunshan in Jiangsu province, Tianjin, Beijing, and Guangzhou in Guangdong province, China.[26]

On May 25, 2016, the BBC reported that Foxconn fired 60,000 employees because it had automated "many of the manufacturing tasks associated with our operations". Foxconn confirmed those claims.[34]

Brazil[edit]

All company facilities in South America are located in Brazil,[35] and these include mobile phone factories in Manaus and Indaiatuba as well as production bases in Jundiai, Sorocaba, and Santa Rita do Sapucaí.[36] The company is considering more investments in Brazil.[37]

Europe[edit]

A Foxconn factory in the Czech Republic

Foxconn has factories in Hungary,[38] Slovakia,[37] Turkey[39] and the Czech Republic.[40] Foxconn factories are strategically located in Europe to ensure rapid fulfillment for its customers. It is the second-largest exporter in the Czech Republic.[40]

India[edit]

Foxconn has had operational units since 2006 in the Special Economic Zone of Chennai, Tamil Nadu.[41] This unit closed as of December 24, 2014. This affected 25,000 employees.[42] As of mid 2015, Foxconn Technology was in talks to manufacture Apple's iPhone in India.[43] In 2015, Foxconn announced it would be setting up twelve factories in India and would create around one million jobs.[44] Foxconn will invest in India in manufacturing, energy and e-commerce sectors in 2015. Foxconn will also bring supply chain companies in India. India will work with Adani[clarification needed] for more efficient expansion of Foxconn in the country. In August 2015, Foxconn invested in Snapdeal. On August 8, 2015, Foxconn signed a MOU with the Government Of Maharashtra to set up an electronics manufacturing plant in Maharashtra with the investment of $5 billion within a 5-year period.[45] Recently, it started manufacturing products for Xiaomi, OnePlus and Gionee.


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.[46]

Foxconn likely acquired these plants when it purchased Sharp in 2016.

Malaysia[edit]

As of 2011, Foxconn had at least seven factories in Johor state,[47] possibly at Kulai, where it is developing an industrial park that will include four factories once completed.[48]

Mexico[edit]

Foxconn has a facility in San Jerónimo, Chihuahua, that assembles computers,[49] and two facilities in Juárez – a former Motorola production base that manufactures mobile phones,[50] and a set-top box factory acquired from Cisco Systems.[51] LCD televisions are also made in the country by Foxconn, in a plant acquired from Sony.[52]

Middle East[edit]

Turkey[53]

South Korea[edit]

The company invested $377 million in June 2014 to pick up a 4.9 percent shareholding in South Korean IT services provider SK C&C.[53]

United States[edit]

President Donald Trump announced on July 26, 2017 that Foxconn will build a $10 billion flat screen TV manufacturing plant in southeastern Wisconsin.[54][55]

The deal is being criticized for the $3 billion in tax-payer funded incentives given to Foxconn.[56] The state of Wisconsin would have to pay a subsidy to Foxconn of up to $250 million each year for fifteen years.[57] An analysis by the Wisconsin State Legislature's nonpartisan budget office determined that state taxpayers would recoup their investment in 2043.[58]

In return, the deal would return an estimated $181 million each year. This loss, according to economics professor Michael Hicks, amounts to a payment of $1,200 from each household to Foxconn.[59]

Foxconn would also be exempt from an environmental impact statement and be able to avoid several other environmental protection rules that other companies must comply with.[57]

As of 4 Oct 2017, Foxconn agreed to locate their plant at Mount Pleasant, Wisconsin.[60]

Major customers[edit]

Major customers of Foxconn include or have included:

(headquarters location in parentheses)

FIH Mobile[edit]

FIH Mobile is a subsidiary of Foxconn offering services such as product development and after-sales support. It was incorporated in the tax haven of the Cayman Islands in 2000.[76]

On May 18, 2016, FIH Mobile bought part of Microsoft Mobile's feature phone division. Microsoft Mobile Vietnam is also part of the sale to FIH Mobile, which consists of the Hanoi, Vietnam manufacturing facility. The rest of the division has been sold to a new Finland-based company founded by former Nokia staff, HMD Global, who started developing and selling new Nokia-branded devices from early 2017.[77] The total sale to both companies amounted to US$350 million. FIH Mobile is now manufacturing new Nokia-branded devices developed by HMD.[78] The first batch of international Nokia-branded devices was unveiled on February 26, 2017, at the Mobile World Congress.[79]

Controversies[edit]

Foxconn has been involved in several controversies relating to employee grievances or treatment. Foxconn has more than a million employees.[80] In China, it employs more people than any other private company as of 2011.[37]

Working conditions[edit]

Allegations of poor working conditions have been made on several occasions.[81] News reports highlight the long working hours,[29][30] discrimination against mainland Chinese workers by their Taiwanese co-workers,[82] and lack of working relationships at the company.[83] 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,[10] the audit did substantiate several of the allegations.[84] Despite the suicide crisis which took place from January to May 2010, Steve Jobs defended Foxconn in June 2010 as being "pretty nice" and "not a sweatshop".[85]

Concerns increased in early 2012 due to an article published in The New York Times.[86] Substantiating some of the article's claims, 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.[87][88]

A Hong Kong non-profit organisation, Students and Scholars Against Corporate Misbehavior, has written numerous negative reports on Foxconn's treatment of its employees.[89] These typically find far worse conditions than the 2012 Fair Labor Association audit did,[citation needed] but they rely on a far smaller number of employee informants—100 to 170.[90] The Fair Labor Association audit in 2012 used interviews with 35,000 Foxconn employees.[87]

In January 2012, about 150 Foxconn employees threatened to commit mass-suicide in protest of their working conditions.[91] In September 2012, a fight at worker dormitories in Taiyuan, Shanxi, escalated into a riot involving 2,000 people and was quelled by security.[92][93]

In October 2012, the company admitted that 14-year-old children had worked for a short time at a facility in Yantai, Shandong Province.[94] Foxconn said that the workers involved were part of an internship program.[94] Individuals as young as 16 can legally work in China.[94]

Also in October 2012, a young worker, Zhang Tingzhen, was threatened to have Hon-Hai medical support canceled when doctors protested against moving him ("Zhang’s doctors fear he is at risk of a brain hemorrhage en route"[95]) for treatment in Huizhou from the hospital in Shenzhen. His doctors did "surgery to remove nearly half his brain, [after which] he lost his memory and can neither speak, walk"[95] after a factory accident where he suffered an electrical shock and fell. This left him in no condition to travel to Huizhou, the city where he was initially hired, 43 miles away. The company stated that it was acting within labor laws.[95][96][97][98]

In November 2017, Foxconn annonced that it has stopped the interns' illegal overtime work at its iPhone X factory in Henan province, China.[99]

Suicides[edit]

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.[100]

Sun Danyong, a 25-year-old man, committed suicide in July 2009 after reporting the loss of an iPhone 4[101] prototype in his possession.[102]

In reaction to a spate of worker suicides in which 14 people died in 2010,[103] a report from 20 Chinese universities described Foxconn factories as labor camps and detailed widespread worker abuse and illegal overtime.[104] In response, Foxconn installed suicide-prevention netting at the base of buildings in some facilities,[81] and it promised to offer substantially higher wages at its Shenzhen production bases.[105] 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.[106]

See also[edit]

References[edit]

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