Foxconn: The Largest Electronic Contractor With Customer Such As Apple, Amazon, Sony, Microsoft
Foxconn is the world’s largest electronic contract manufactures. Hon Hai Precision Industry Co., better known as Foxconn Technology Group currently employs 803,126 personal. Today Foxconn’s clients include some of the best-known technology companies in the world, Foxconn covers everything from the iPads for Apple, Kindle for Amazon, PlayStations for Sony, Xboxes for Microsoft. Foxconn factories manufacture 40% of all consumer electronics sold worldwide.
Foxconn was founded in 1974 by Terry Gou, Terry started by working in a factory on a grinding wheel until the age of 24. With savings of $7500 and with the vision to provide low-cost electronic products, he started a company in a shed with ten employees making plastic knobs for radios. To get more clients, Gou started to make phone calls and kept calling companies for 6 years. And then in 1980, he got a call from Atari, getting an order for 15,000 game console joysticks. This at the time was a massive order, he made plans to visit the United States and went on an 11-month trip to find more contracts. With countless walk-ins, he managed to land more customers. In 1981 he started to manufacture connectors for computer industry. And then in 1988, he opened his first factory in mainland China, Shenzhen. Today it is the largest factory of Foxconn. Some Foxconn factories however are also controversial.
The growth was pretty rapid from there, in 1991 they were listed on Taiwan Stock Exchange, in 1996, Foxconn started building chassis for Compaq desktops. This was a breakthrough moment that led to some other customers, including HP, IBM, and Apple. Within just a few years, Foxconn became a leader in manufacturing electronic components. In 2001 the company was awarded a contract by Intel to manufacture their motherboard. By 2002 they were the largest Chinese exporter. In 2007, they announced a plan to build a new plant worth 500 million dollars, and by 2010 they crossed 100 billion dollars in sales. In 2016 they were ranked 25th on the Fortune Global 500, making Gou’s net worth at $5.6 billion.
The key selling point for Foxconn is the quality and their quick turnaround time. With a large team of employees at their manufacturing plant, the manufacturing takes care of itself. And by having locations all over the world, they can deliver their products in a timely manner. Starting out in China helped them scale quickly; they were able to produce high quantity at a low cost. Then in September 2012, Foxconn announced plans to invest $494 million in the construction of five new factories in Brazil, creating 10,000 jobs. This investment was successful, not just for increasing their numbers, but also for global expansion. Countries started to welcome Foxconn’s, today they have 40 factories located in China, Mexico, Brazil, Hungary, Slovakia, Australia, and the United States providing over 803,000 jobs.
Despite all the success, Foxconn has had its challenges. As the labor cost was increasing in China, the executives sat down and did an estimate. They made a decision to let go of 60,000 factory workers. 120,000 hands were to be replaced, and in 2016 with a statement
“we are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees,”
Foxconn started to introduce robots in their factories.
By 2015, 50% of Foxconn’s revenue was based on business with Apple. But Gou did not want to rely on one customer. So in 2016, he made a deal with major electronic companies such as Sharp, HP, Dell, Samsung, Lenovo, Sony.
The company is best known for its assembly line workers. Which include thousands of engineers, toolmakers, and skilled personal. With the workers also comes the working condition, because Foxconn attracts a lot of business by having workers close to the assembly line, an average worker works 12 hours in a day, with two one hour meal breaks. In 2013 after the passing of the Chinese labor law, Foxconn announced that no employee can work more than an average of 49 hours a week. At one of the factories in Longhua, there are approximately 235,000 workers. A mother working at the factory said that she meets her kids once a month. Sadly 18 people have jumped out of the factory, causing them to put suicide nets in place. Workers spend their spare time either watching a movie on their phone or playing games in a nearby cafe. Reports for poor working conditions at the factories have been published, what the company does in regards to working conditions, is yet to be seen.
By completing orders on time and maintaining quality, Foxconn has made themselves one of the biggest electronics manufacturers in the world, they have sold over 175 billion dollars worth of products in 2019. So, the next time you use a tablet or an iPhone, just remember, the company that manufactured your device, started off in a shed with 7500 dollars and 10 employees.
