Foxconn was "hunted" by a super consortium, and Terry Gou could not hide his anxiety
Background. Foxconn is the world's largest foundry giant, and its factories in Chinese mainland have achieved great success. However, Foxconn founder Terry Gou recently announced that he wants to accelerate his exit from China and intends to focus on developing India. However, progress in India has not been as smooth as he had hoped, and it has even faced siege from large conglomerates such as the Tata Group. The situation made Gou very uncomfortable and forced him to reconsider his decision.
The success of the Chinese factory.
Foxconn's great success in Chinese mainland is mainly due to two factors. First, labor costs were low in China at the time, which gave Foxconn huge profit margins in this predominantly labor-intensive industry. Secondly, the efficiency and conscientiousness of Chinese workers have won the favor of customers such as Apple. It is the combination of these two advantages that has made Foxconn one of Apple's major OEMs and has achieved significant growth.
Terry Gou's miscalculation.
Despite his success in Chinese mainland, Gou was not grateful to Dade for this, but resolutely decided to accelerate the abandonment of factories in China in times of crisis, causing more trouble for Foxconn. However, his plan did not go as smoothly as expected. Foxconn's development in India is slow, with a limited number of workers, low production efficiency, and frequent accidents such as strikes and fires. This situation has caused Foxconn to lose favor with Apple, lose some OEM orders, and face strong competition from Indian super-conglomerates such as the Tata Group.
Overview of the Tata Group.
India's largest giant conglomerate, the Tata Group, acquired Apple's entire mobile phone assembly division from Wistron India, and then entered Apple's ** chain. This is a huge shock for Foxconn, because the Tata Group not only has a local advantage, but also a strong capital. According to reports, Tata Group executives have made it clear that the former Wistron management team has doubled the salary to retain talent and compete with Foxconn in the OEM field. In addition, Tata Group also intends to continue to acquire the Apple phone manufacturing arm of Pegatron, another large Indian foundry, which, if successful, would further undermine Gou's plans to turn India into a new Foxconn base.
Guo Degang's embarrassment and hesitation.
Mr. Gou appears to be terrified by the Tata Group's bombardment, and according to Foxconn insiders, he is considering delaying plans to move the factory out of China. Mr. Gou worries that if Foxconn's plans to build a factory in India fail and the production scale of the Chinese factory is reduced, the company will completely lose Apple's favor. As a result, he is trying to reassess the current situation and adjust his strategy, a move that shows both Gou's desire to return to the Chinese market and his fear of being replaced by rivals such as the Tata Group.
Reflections and conclusions.
Foxconn is known for its success in Chinese mainland, but Gou's decision deviates somewhat from his original intention. The siege of the Tata Group and other big Indian conglomerates has made Foxconn's future even more uncertain. However, as Chinese, we should not be too pessimistic about this. On the contrary, we should take this as an opportunity to increase our efforts to develop our own manufacturing industry, master basic technologies, and create more tech giants to cope with possible challenges and changes. At the same time, we must also learn the lessons of the Terry Gou incident, always be vigilant against the real motives of these non-local enterprises, remain vigilant, and resolutely defend our fundamental interests. Only in this way can we gain a firm foothold in the international arena and make greater contributions to the development of China's manufacturing industry.