Foxconn, the giant of the electronics manufacturing industry, has recently become the focus of the media, and after experiencing Terry Gou's "election turmoil, unconcealed speech" and the mainland's thorough investigation of it, Foxconn has also begun to respond, but their actions, no matter how you look at it, have some "counterattack" in it.
Behind this decision, the strategy and remarks of Foxconn founder Terry Gou have become the focus of public opinion. After years of preferential policies and market support in Chinese mainland, Gou and his company's shift has sparked widespread public discussion about his "eating and smashing pots".
According to media sources, Foxconn announced at the beginning of this year that it would cooperate with HCL in India to establish a new chip packaging and testing company in India.
According to the announcement, Foxconn originally planned to acquire a 40% stake in the joint venture for $29.4 million through its subsidiary Big Innovation Holdings Limited. However, due to investment adjustments, Foxconn decided to use Mega Development, a subsidiary of Hon Hai in India, as the main investor.
It is reported that the company plans to invest US$37.2 million in the new joint venture, and the shareholding ratio is still 40%. This adjustment not only increases the amount of investment, but also directly reflects Foxconn's determination to "recharge" in the Indian market.
Hon Hai Group emphasized that it will continue to use the Localized Operations (BOL) operating model to support the development of local communities in India. It can be seen that Foxconn not only focuses on business interests in India, but also pays more attention to sustainable development and deep integration in local communities.
At the same time, Hon Hai's partnership with HCL is seen as a clear signal of a strategic shift in the Indian market. HCL Group is known for its strong capabilities in the field of engineering and manufacturing.
HCL Group is reportedly currently in active engagement with the Karnataka government to set up an outsourced semiconductor assembly and test (OSAT) facility. Once successful, the cooperation will not only further strengthen Foxconn's position in the global semiconductor industry, but also bring new growth drivers and employment opportunities to the local economy in India.
Since last year, Foxconn has been caught in the vortex of public opinion in Chinese mainland. First of all, Guo Taiming made wild remarks, comparing Foxconn's investment in the mainland to "rewarding food", which seriously hurt the national feelings of the Chinese people. Then he announced that he would run for the "leader" of the Taiwan region as an independent candidate, and for a time Guo Taiming and Foxconn stood on the cusp of public opinion.
Since October last year, several regions in mainland China have conducted joint investigations into Foxconn's factories and industrial parks in China, focusing on tax and land use.
As soon as the news came out, Foxconn's stock price plummeted, and on the first day of the investigation, Foxconn's stock price opened with a limit, and the company's market value evaporated by more than 200 billion.
However, the mainland side still showed mercy to Foxconn's subordinates, and the board raised high was finally gently lowered, and Fuji was finally fined 20,000 yuan. While the amount of the fine may seem insignificant in the sheer scale of a company's operations, the penalty is symbolically significant. That is to tell Terry Gou, you can't talk nonsense, otherwise it won't be as simple as 20,000 yuan next time.
It may be this kind of open and secret struggle that has contributed to Foxconn's determination to "run away". After the incident, a source within Foxconn said that after the investigation of the incident, Foxconn began to focus on relocating the industry out of Chinese mainland.
According to them, it is called "production base diversification". Because in their opinion, this sudden inspection was unexpected, and it seemed to them an unusual "warning".
A month after the investigation, Foxconn filed documents with Taiwan's securities exchange department, saying that its subsidiary in India would spend 128 billion rupees (about $1.5 billion) to build a new plant to meet operational needs.
In December, Foxconn added another investment in India, according to a Bloomberg report, Foxconn is expected to add about $1 billion to an industrial park near Bangalore airport to add new equipment. Counting the previous investment budget, Foxconn has invested nearly $3 billion in this 300-acre factory area.
From a series of actions of Foxconn, it can be seen that Foxconn is constantly increasing its investment in India and going further and further on the road of "withdrawing" Chinese mainland. In the words of the media, "not ready to turn back". The support of Chinese mainland has played a pivotal role in Foxconn's development.
Foxconn set up its first factory in Chinese mainland in Shenzhen in 1988, which was then a small and inconspicuous factory. Thanks to the promotion of China's reform and opening up policy and the huge potential of the Chinese mainland market, Foxconn quickly seized the development opportunity. Through cooperation with internationally renowned companies such as Apple, Sony, and Dell, Foxconn has begun to emerge in the electronic manufacturing services (EMS) industry.
The Chinese government has provided a series of preferential policies to attract foreign investment, especially in the manufacturing sector, including tax exemptions and preferential land use rights. Foxconn is one of the beneficiaries of these policies. By enjoying these preferential policies, Foxconn is able to expand production scale and improve production efficiency at a lower cost, thereby enhancing competitiveness.
In addition, Chinese mainland's huge labor market provides Foxconn with sufficient and relatively low-cost labor resources. It can be said that Foxconn's success in the mainland is a typical example of complementary advantages, one side has capital and technology, and the other side has resources and labor, and it is this complementarity that has created a win-win situation, and Foxconn has gradually grown into the world's largest electronic product OEM manufacturer.
But now Guo Taiming is eating the mainland's food, but he wants to smash the mainland's pot, and after using the mainland's resources to complete the accumulation and development, he has to leave the mainland and throw himself into the arms of India.