Foxconn: why the world’s tech factory faces its biggest tests

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Few companies epitomise the era of globalisation better than Hon Hai, the world’s largest contract electronics manufacturer. Known as Foxconn Technology Group, its formula for success includes: massive plants in China run with an abundant supply of low-cost labour, proximity to clusters of suppliers and a reliance on free trade and a seemingly insatiable global appetite for mass market devices.

Over the past 15 years, Foxconn has grabbed a significant share of the orders to make personal computers and smartphones for brands such as Apple, Dell and Huawei. Along with rival manufacturers from Taiwan such as Quanta Computer, Pegatron and Wistron, it has led a constant race to make the manufacturing process cheaper, faster and more efficient.

This Tuesday will be a historic day for Foxconn, when it will host an investor conference for the first time ever. On the agenda at the event in the Taipei suburb of Tucheng, which translates as Dirt City, is the looming existential challenges for a company which is both the world’s largest assembler of Apple iPhones and China’s biggest private sector employer.

The immediate order of business is to explain how the company will be run after Terry Gou, the tycoon who founded it 45 years ago, steps down as chairman to enter politics and run for the Taiwanese presidency.

But the even bigger issue will be how Foxconn plans to navigate two separate threats from politics and from artificial intelligence which have the potential to wreck the business model of the handful of Taiwanese electronic manufacturing services companies that dominate the consumer technology supply chain.

The company is caught in the middle of the escalating trade war between the US and China — the one-time champion of globalisation now suffering as more hawkish members of the Trump administration … Read More...