Hon Hai Precision Industry, the cornerstone company for Foxconn Technology Group, will turn to the stock market to fund its desire to make the company a leader in manufacturing worldwide. But first Foxconn needs to heal its wounds. (Logos via Hon Hai & Foxconn)
Founded in 1974 by Terry Gou, Hon Hai Precision Industry is a company built on the idea that the world could not thrive without electronics. With his $7,500, Gou started a company that became a benchmark for other companies in the same industry. Throughout the years, Hon Hai had managed to always keep its overall cost at a minimum, while providing the best products on the market to clients from every field possible: nanotechnology, heat transfer, wireless connectivity, etc. the company marked history when it kept its margins at a high for the last 6 years consecutively. So it is understandable that the company reacted aggressively when things went left on the seventh year.
Decreasing margins are the presage for the world’s biggest maker of electronics, according to experts. Due to the rising cost of grind accompanied by some issues related to Apple’s latest iPhone, Foxconn Technology Group is forced to reduce its production. As a result, the company might be losing a tenth of its usual proceeds. To the point that the chairman of the group, Terry Gou commented recently during a celebration of the Chinese New Year, that the company will revise its recipe for prosperity in order to ensure improvement.
Exploiting this critical point, Foxconn Technology Group intends to register one of its subsidiaries in Shanghai on the city’s “Wall Street.” This move is expected to yield a little over four billion dollars which will serve in many projects including the restructure of the smart devices’ system of production. In addition, the company will invest in new equipment while upgrading some other. The new equipment includes some automatons which will allow the automation of the production of Apple’s products. Of course, removing humans from the production operations poses the question of how to detect imperfection. But Foxconn’s leaders have thought even of that: there will be high-resolution detectors, especially for the flaws that escape the human eyes.
Foxconn’s plans for automation are not singular. Innolux, one of Foxconn’s affiliates is also in the race for a more automatic production method. Those two companies are just a few links in a vision of making the Chinese republic the worldwide manufacturing master. Although the future of the industry seems bright in China, some specialists are not even convinced that Foxconn Technology group will survive its fall on the stock market. To that, Gou replied that he would not rest until he brings the company value to 200 New Taiwan dollars the share; no matter what changes such goal might require.
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