What Does Foxconn Make? Hon Hai (2317.TW) introduction

Foxconn Company Overview

Foxconn Technology Group (TWSE: 2317), established in 1974, is the world’s largest provider of Electronic Manufacturing Services (EMS), holding over 40% market share and operating in over 20 countries.

In 2024, Foxconn ranked 32nd in the Fortune Global 500 and actively invests in emerging industries such as electric vehicles, digital health, and robotics, integrating artificial intelligence and semiconductor technologies to provide comprehensive solutions.

Foxconn History and Background

Foxconn Technology Group (Hon Hai Precision Industry Co., Ltd.) was established on February 20, 1974, initially focusing on the production of television knobs. With the evolution of technology and market demands, the company expanded into the production of computer connectors and went public in June 1991 in Taiwan. Today, Foxconn has become the world’s largest provider of electronic component and module vertical integration services (eCMMS), with operations spanning information technology, communications, automation equipment, optoelectronics, precision machinery, automotive, and consumer electronics industries, supported by numerous production sites worldwide.

Foxconn Business Scope and Product Structure

Foxconn’s products can be divided into several main categories:

• Consumer Electronics: This includes smartphones, feature phones, wearable devices, gaming consoles, set-top boxes, and speakers, which account for 54% of total revenue.
• Cloud Network Products: Including servers, edge computing devices, data centers, and routers, making up 22% of revenue.
• Computer Terminals: This encompasses desktop computers, laptops, tablets, and printers, which contribute 18% of revenue.
• Components and Others: Primarily connectors, precision optical components, and automotive electronic parts, which account for 6% of total revenue.

According to the third-quarter report of 2023, the demand for consumer electronics remains strong, especially in the assembly of smartphones and gaming consoles, reflecting Foxconn’s competitiveness in the global market.

Products and Competitive Conditions

Product and Technology Overview

Foxconn’s contract manufacturing includes a variety of end products:

• Consumer Electronics: Smartphones, feature phones, wearable devices, gaming consoles, set-top boxes, and speakers.
• Cloud Network Products: Servers, edge computing devices, data centers, and routers.
• Computer Terminals: Desktop computers, laptops, tablets, and printers.
• Components and Others: Connectors, precision optical components, lenses, and automotive electronic parts.

In 2021, Foxconn established a research institute focusing on electric vehicles, digital health, and robotics, aiming to enhance core competitiveness in areas such as artificial intelligence, 5G communication, quantum computing, semiconductors, and information technology.

Key Raw Materials

The primary raw materials used in Foxconn’s production and assembly include copper, plastic pellets, gold salt, and steel. A stable supply of these raw materials is crucial for the company’s production efficiency and cost control.

Major Production Sites

Foxconn’s global production sites are located in Taiwan, mainland China, the United States, Mexico, Vietnam, Malaysia, India, Slovakia, Brazil, Hungary, and the Czech Republic. The company plans to set up a panel factory in Pennsylvania, USA, with an estimated investment of $7 billion, specializing in the production of small to medium-sized panels for automotive and mobile devices, expected to be operational by 2020. Additionally, Foxconn has partnered with Xiaomi to establish a mobile phone processing factory in India to meet local market demands.

Market Sales and Competition

Sales Performance

Foxconn’s major customers span various sectors, including HP, Dell, Apple, Nokia, Sony, and Cisco. The subsidiary, Foxconn, has also partnered with Hivemind Agricultural Science to develop drones, primarily targeting the Chinese market.

Foxconn is also collaborating with its subsidiary Sharp to re-enter the IT equipment market, planning to launch new personal computers and related products, which are expected to enhance its market competitiveness.

Domestic and International Competitors

Foxconn’s main competitors include Celestica, Elcoteq, Flextronics, Jabil, Sanmina-SCI, Inventec, Wistron, Quanta, and Compal. These companies possess significant technology and market resources in the electronic manufacturing services sector, prompting Foxconn to continuously enhance its competitive edge.

Financial Information

Investments and Major Subsidiaries

Foxconn’s major subsidiaries and their products include:

• F-ETERNAL: TV components and large molds
• F-CHAMPION: FPCB, PCB, HDI
• Taiwan Telecom: Optical fiber network
• Taiwan Yang: Access equipment
• Zhengda: Glass substrates
• Asia Pacific Telecom: Telecom operations

These subsidiaries have strong technological advantages and market shares in their respective fields, helping Foxconn solidify its position in the global market.

Divestiture

In 2013, Foxconn announced the spin-off of certain business units into independent companies, including connectors, carbon nanotubes, adhesives, networking, and touch panels. This separation helps focus on core businesses and enhances the professionalism and market competitiveness of each division.

Collaboration Initiatives

Foxconn actively seeks collaborations with other companies to expand its business scope. For example, it signed a cooperation agreement with Fiat Chrysler Automobiles to establish a joint venture for electric vehicle development and partnered with the Yulon Group to accelerate its entry into the electric vehicle market. These partnerships not only strengthen Foxconn’s competitive position in emerging markets but also promote technological innovation and application.

Through this detailed content, Foxconn Technology Group not only maintains a strong competitive position in the market but also demonstrates its commitment to technological innovation and business expansion, ensuring sustained growth potential in the global electronics industry.