Guo Taiming began to think about the future, and the foreign media ** insider.
In the early days of China's semiconductor industry, the scientific and technological background was insufficient, and since the 80s, a large number of wafer foundries have been introduced, including the Taiwanese company Foxconn. After Foxconn entered China, thanks to orders from Apple and high-quality workers from the mainland, Terry Gou became the world's "top 500" and the richest "OEM king" in the world by Forbes. Guo Taiming once proudly said that TSMC can move to Taiwan at any time and set up factories in the mainland, which is equivalent to giving the mainland a piece of food, which has also aroused the anger of many netizens. Some time ago, Foxconn announced the news of its expansion of its factory in India, and foreign ** said that Guo Taiming's move was to "settle accounts after the autumn", is it true?
Foxconn will build a factory in India, and the reason for this is due to Apple's expansion of production capacity around the world.
In the past two years, Apple has been working to extend its industrial chain from the mainland to the outside because it does not want to rely on a specific market or a company. According to data, Foxconn in the mainland provides 70% of the orders for iPhones produced in the world, bringing up to one trillion dollars in revenue to the mainland. At the same time, Apple is also seeking international development, and wants to gradually get rid of its dependence on mainland manufacturers, as a "queen" foundry, Foxconn, no matter where it is, must meet Apple's requirements as the premise, and put profits first.
In recent years, India has been paying more and more attention to the Indian market due to its growing population and economy. Not long ago, Apple CEO Tim Cook attended the opening ceremony of a store in India and was personally received by Indian Prime Minister Narendra Modi. Apple's rapid growth in production and sales in India, coupled with the country's abundant low-cost labor resources, has decided to turn its attention to India. Luxshare Precision, Sunny Optics, Han's, and more than a dozen other domestic "fruit chain" enterprises have also been approved to expand production capacity in India, and will set up factories in India in the future.
Foxconn, which now employs around 17,000 people in India, plans to increase its workforce to 100,000 by 2024 and increase its annual production capacity of iPhones to about 20 million units from 6 million units some time ago. At the same time, Apple's investment in India will also quadruple or triple. Establishing a factory in India will help Apple reduce its overall costs while also helping it expand into the Indian market. Foreign ** said that this was Guo Taiming "settling accounts", but the fact is that this is just a means taken by the company to make a profit. However, Foxconn's engagement has deepened its dependence on Foxconn, and Guo Taiming did not realize that the mainland and Foxconn are mutually beneficial and win-win, and it is by no means what he called "rewarding rice".
Without the mainland, Foxconn would not have been able to grow.
Foxconn's rapid development comes from orders from Apple on the one hand, and manufacturing in China on the other. Apple is a very demanding company, but it has also made Foxconn the best in terms of craftsmanship and equipment. With Guo Taiming's financial resources, coupled with his ability to pay for goods in a timely manner, and Foxconn's shares, Foxconn quickly made a fortune. Unlike Foxconn, what mainland contracting companies lack is customers like Apple.
Indeed, Foxconn has provided tens of thousands of jobs in the mainland and driven the local economy. Taking Zhengzhou Foxconn as an example, it had about 300,000 permanent employees at its peak, and its upstream and downstream chains created about 800,000 jobs for it, paying 7 billion yuan for Zhengzhou every year. In 2019, Foxconn had more than 40 factories in mainland China, employing about 1.2 million people, and generating more than one billion yuan in tax revenue.
However, Foxconn and Foxconn are a win-win situation, with a large number of high-quality workers and local preferential policies, which have made it very profitable in the mainland. If it weren't for the overtime manufacturing and technical proficiency of mainland employees, how could Foxconn swallow so many Apple phones? With such a large-scale scale of production, looking at the entire continent, who else could there be?
Foxconn has developed vigorously in the mainland, and there are also a lot of "black materials" during this period. Terry Gou himself is a workaholic who works 11 hours a day. Foxconn is known for its frequent overtime and high-intensity work, and is known as the "iron-blooded factory". An Apple can earn more than a thousand dollars, while an assembler can only earn less than 70 dollars.
And Foxconn has been underperforming for three years in India. Without a well-developed infrastructure, a well-developed industrial chain, and a high-quality workforce, factories in India will face increasingly high production costs. At the same time, factories in India could not meet Apple's needs, and Foxconn had to pay high wages to ensure supply at a factory in Zhengzhou. Obviously, as Gou said, Foxconn is not ready to move away.
At this stage, Foxconn relocated to India, resulting in the loss of jobs for employees in the mainland. But it is also a good opportunity for mainland OEMs. Compared with Foxconn, there are many differences between the foundries in the mainland, both in operation and in the first chain, and the departure of Foxconn just makes enough room for them. After Foxconn reduced production, Zhengzhou invited BYD to settle in BYD's own foundry. Even if it did not receive orders from Apple, BYD also received orders from domestic manufacturers such as Huawei and Xiaomi. Therefore, the development of Taiwan's chip industry will ultimately depend on our own breakthroughs in the chip industry to create more high-level job opportunities.
Some time ago, Foxconn announced the news of expanding production capacity in India, and foreign ** speculated that this may be Foxconn's founder Terry Gou retaliating against this, but in fact, this is just a trade-off between Foxconn and Apple. Foxconn was developed in the mainland, but it is not so easy to get out of the mainland. For us, whether it is Foxconn or Apple, we must unswervingly develop our chip industry and firmly grasp our own initiative.