When it comes to Foxconn many people think it is a labor-intensive electronics factory and turn their noses up at it, but in fact it is the world’s largest foundry, monopolizing the production business of many hardware products, among which Apple gives almost all orders for iPhones, Mac computers, etc. to Foxconn.
Therefore, Foxconn is of great significance both for solving employment and for regional economic development.
According to media reports, at the end of March last year, under the gradual improvement of the Epidemic, 810,000 people have resumed work at Foxconn’s 27 major plants, with an overall resumption rate of 93.7%. According to this rough estimate, Foxconn has more than 850,000 employees in the mainland. In addition to Foxconn employees, there are more than 10,000 upstream and downstream enterprises above and below it.
Another set of data shows that in the first quarter of 2020, enterprises under Foxconn in Zhengzhou completed import and export of 78.8 billion yuan, contributing 77.5% and 75.8% of the total import and export to Zhengzhou respectively.
So, what about Foxconn factories really moving overseas?
Foxconn moves its China factories overseas
In recent years, Apple has been opening new factories overseas, and Foxconn has followed Apple to build factories in the United States, India and Vietnam. Recently, Foxconn announced that it would build an additional RMB 4.5 billion to build a factory in Vietnam, and by the end of 2020, it had invested as much as USD 1.5 billion (RMB 9.76 billion) in Vietnam and expects to continue to invest USD 700 million (RMB 4.55 billion). According to Vietnamese media analysis, Foxconn will provide 50,000 jobs for the country in the next two years.
In August 2020, according to media reports, Foxconn is considering relocating some of its factories to “Mexico”, the U.S. backyard, due to Sino-U.S. tensions and the new crown virus, among other factors. Currently, Foxconn has five factories in Mexico, mainly producing televisions and servers. Sources said that Foxconn is likely to cooperate with Apple in the production of iPhone this year.
Meanwhile, Foxconn’s current chairman Liu Yongwei said at an investor conference in Taipei that the world has split into two blocs with the development of US-China relations. He also said that Foxconn now produces about 30 percent of its products outside of China, and that this percentage may rise, and that China’s status as the world’s factory will no longer exist.
Many netizens commented to the point that after Guo finished making his money in the mainland, he secretly withdrew the factory line from China.
Earlier, in 2015, in line with Apple’s long-cherished desire to diversify its supply chain and move about one-fifth of its China-based manufacturing operations to India, Guo invested $5 billion in Indian factories, planning to build 10-12 plants in five years, and due to poor progress, only two plants with just over 10,000 workers were built as a result of these investments.
But that didn’t make Guo give up on following Apple’s lead, as Foxconn expects to continue investing 2.2 billion yuan over six years in India to produce Apple products such as iPhones.
According to the data, Apple’s iPhone business in India doubled year-on-year in the fourth quarter of 2020.
If Foxconn fully relocates overseas, it may directly cause over 850,000 people to lose their jobs.
Foxconn that can’t stay
In 2018, before the implementation of the registration system, Foxconn spun off one-third of its business, including communication network equipment, cloud service equipment and precision tools and industrial robots, and landed on the A-share market as “Industrial Fulian”, setting the fastest record from the meeting to the listing on the Chinese stock market at that Time. However, the A-share listing did not include the business of assembling Apple phones.
Some media speculated that the reason for approving the rapid listing of IFTF was to introduce strategic investors to bind relevant stakeholders and make it bigger and stronger on the one hand, and to retain Foxconn on the other.
It is understood that the strategic investors of IFTU include central enterprises such as China Railway, China Motor, Anshan Steel, FAW and Mobile, and financial institutions such as State Investment and Huijin are also involved.
According to the listing statement, there are more than 60 overseas subsidiaries in the assets of IFTF, including Jiyuan Hongfujin, Wuhan Yuzhan and a large number of suspected shell companies, the net assets and net profits of these companies on the financial statements are almost zero, and there is no way to know the real operation.
The gross profit margin of Industrial Fulian, which is mainly engaged in pan-technology business, has also declined year after year, from 2016 to the third quarter of 2020, its gross profit margin was 10.65%, 10.14%, 8.64%, 8.38% and 7.51% respectively.
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