Foxconn, the world’s largest electronics manufacturer, is at a crossroads. While it continues to thrive as Apple's primary contract manufacturer, the company is also exploring new opportunities to move up the value chain and diversify its business. One of the biggest challenges Foxconn faces is balancing its foundry operations with the development of its own branded products. Producing its own smartphones could potentially conflict with its existing customers, including Apple, which relies heavily on Foxconn for manufacturing.
In addition to this strategic challenge, Foxconn’s reliance on Apple remains a major risk. The company generates over half of its revenue from Apple, making it vulnerable if the iPhone loses its market appeal or if Apple shifts production elsewhere. This dependency has raised concerns about the long-term sustainability of Foxconn’s business model.
Another issue that looms over the company is the succession plan for Terry Gou, the 66-year-old founder and chairman of Hon Hai Precision Group. As he ages, the question of who will lead Foxconn in the future remains unanswered. His son, Guo Shou-heng, works within the company but still operates under his father’s shadow. Meanwhile, his daughter has shown little interest in the family business, leaving the future leadership uncertain.
Recent reports highlight Foxconn’s efforts to expand into higher-value areas by acquiring key components such as memory chips and display technology. The company has already acquired Sharp, a Japanese electronics firm known for its high-quality displays, and is now targeting Toshiba’s memory business. These moves are part of a broader strategy to reduce reliance on low-margin OEM (Original Equipment Manufacturer) contracts and build its own brand.
Terry Gou has also been actively engaging with other tech giants. For example, he has partnered with Andy Rubin, the creator of Android, who recently launched his own smartphone brand, Essential. Foxconn provided financial and production support for the project. Additionally, Foxconn produces its own branded devices under the In Focus label, though these remain largely unknown outside of Taiwan.
Despite its global scale, Foxconn has faced criticism over labor practices. Reports of strict management, long working hours, and poor working conditions have sparked controversy. However, the company has made efforts to improve employee welfare, including better pay and mental health support. Despite these issues, many young workers still seek jobs at Foxconn due to the relatively stable income.
Foxconn’s operations are massive. At peak times, it employed over a million workers in China, and even with automation, it still employs around 700,000. Its main iPhone production line is located in Zhengzhou, earning the city the nickname “City of iPhones.†According to Macquarie, the factory in Zhengzhou can produce 500,000 iPhones per day, making it one of the most efficient manufacturing hubs in the world.
The company’s stock price has surged this year, reaching over 120 Taiwanese dollars, reflecting investor confidence in its future growth. Part of this optimism stems from expectations that Foxconn will play a key role in producing the next generation of iPhones with OLED screens.
Beyond Apple, Foxconn also manufactures products for Amazon, Sony, Nintendo, and HP. Its diverse client base gives it some stability, but its heavy reliance on Apple remains a concern.
In response to U.S. trade policies, particularly those under President Trump, Foxconn has announced plans to build two panel plants in the United States. This move is seen as a way to comply with Trump’s call for domestic manufacturing and job creation. Gou has stated that the investment could create tens of thousands of jobs, although the exact location and timeline remain unclear.
Despite his age, Gou remains deeply involved in the company’s operations, especially in expanding its U.S. presence. He is known for his sharp mind, long work hours, and hands-on approach. However, his leadership style has also raised questions about the company’s future without him at the helm.
As Foxconn looks ahead, it must navigate a complex landscape of competition, innovation, and succession planning. Whether it can successfully transition from a contract manufacturer to a brand-driven company remains to be seen. But one thing is clear: the company’s influence on the global electronics industry is far from over.
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