On October 22, news about the investigation of Foxconn’s subsidiaries was hotly debated by the outside world. The Global Times learned from sources that the tax authorities have recently conducted tax audits on Foxconn Group’s key enterprises in Guangdong, Jiangsu and other places in accordance with the law, and the natural resources department has conducted on-site investigations on the land use of Foxconn’s key enterprises in Henan, Hubei and other places.
Zhang Wensheng, deputy dean of the Taiwan Research Institute of Xiamen University, said in an interview with a reporter from the Global Times on October 20 that the relevant departments’ tax inspections and land use investigations of any enterprise suspected of violating laws and regulations are normal administration in accordance with the law and are reasonable and legal. Foxconn's subsidiaries are obliged to actively cooperate with inspections and investigations. If there are indeed violations of laws and regulations, they should admit their mistakes, admit punishment, and step up rectification.
Zhang Wensheng also emphasized that while Taiwan-funded enterprises, including Foxconn, are sharing development dividends and achieving rapid development in the mainland, they should also assume corresponding social responsibilities and play a positive role in promoting the peaceful development of cross-strait relations.
"Daily Economic News" reporters noticed that on the afternoon of October 22, Hon Hai (Foxconn's parent company) issued a statement in response: "Legal compliance is the group's basic principles around the world. We will actively cooperate with relevant units in relevant operations."
Foxconn has more than 40 campuses in mainland China
Terry Gou came to Shenzhen in 1988 to open a factory and set up a company. Foxconn also established its global dominance as a foundry with the rise of consumer electronics.
According to information on Foxconn's official website, Foxconn has invested in mainland China since 1988 and currently has more than 40 parks in the mainland. At its peak, it had one million employees. Its product range covers consumer electronics, cloud network products, computer terminal products, components and other four major fields.
In terms of performance, in 2022, Foxconn Group's revenue was approximately 1.49 trillion yuan, an increase of approximately 10% from the previous year; the group's total imports were approximately 540 billion yuan, accounting for 3.0% of mainland China's total imports; total exports were approximately 849 billion yuan, accounting for 3.5% of mainland China's total exports.
From the perspective of park layout, Foxconn has deployed in Shenzhen, Foshan, Zhongshan, Dongguan, Huizhou, Guangzhou and other places in the Pearl River Delta region; in the Yangtze River Delta region, it has deployed in Kunshan, Shanghai, Nanjing and other places to form an industrial chain and supply chain aggregation system for precision connectors, wireless communication components, LCDs, network equipment and components, semiconductor equipment and software technology development; in the Bohai Rim In the region, it is located in Beijing, Tianjin, Yantai, Heze and other places, focusing on wireless communications, consumer electronics, nanotechnology, computer components, etc.; in the central and western regions, it is located in Taiyuan, Zhengzhou, Wuhan, Changsha, Nanning, Chongqing, Chengdu and other places, focusing on the development of precision molds, automation equipment, magnesium-aluminum alloys, auto parts, optomechanical and electrical modules, smartphones, tablets, etc.
Foxconn Group’s main industrial parks in mainland China are located in Shenzhen, Zhengzhou, Chengdu, Taiyuan, Kunshan, and Yantai.
Among them, the situation of Zhengzhou Foxconn that has attracted much attention from the outside world is that its foundry production capacity accounts for about half of Apple’s global supply. It is understood that Foxconn has three factories in Zhengzhou, namely the Zhengzhou Airport Factory, the Economic Development Zone Factory, and the Zhongmou County Factory. Among them, the largest production base is located in the port area near the airport, mainly producing iPhones.
Industrial Fii opened at the limit on the 23rd
On October 23, Fii Industrial opened at the limit, with a drop of 10.02%.
In recent years, Apple has been interested in cultivating more partners when it comes to supply chain selection, and Luxshare Precision is one of them. Luxshare Precision has even officially begun competing with Foxconn in Apple’s assembly business.
At the end of 2017, the delivery time for AirPods orders had been shortened to less than 3 days. Cook made a special trip to Kunshan and visited Luxshare's AirPods production line. He said on Weibo: "Their (Luxshare) first-class factory has integrated amazing fine craftsmanship and meticulous thinking into the manufacturing of AirPods. I am very happy to cooperate with them." From the perspective of the industry, these remarks also determined the direction of Luxshare Precision from parts to complete machine OEM.
So far, Luxshare has provided Apple with development and manufacturing services for iPhone, Apple Watch, AirPods, Apple Vision Pro and other products.
Tianfeng International Securities analyst Ming-Chi Kuo once revealed on social platforms that Luxshare Precision has secured orders for the top iPhone 16 model in 2024. The 2024 iPhone 16 will be assembled by Luxshare Precision (iPhone 16 Pro Max), Hon Hai (iPhone 16 Pro, iPhone 16), and Pegatron (iPhone 16 Plus).
Ming-Chi Kuo believes that Luxshare Precision’s iPhone assembly business profits will begin to grow significantly from the second half of this year, and its iPhone shipments this year will reach 45 million to 50 million units (only about 20 million units in 2022).
Luxshare Precision's recently released third quarter report for 2023 shows that in the first three quarters, the company achieved operating income of 155.875 billion yuan, a year-on-year increase of 7.31%; net profit attributable to the parent company was 7.374 billion yuan, a year-on-year increase of 15.22%. Regarding the reasons for the increase in revenue in the first three quarters, Luxshare said in the financial report: "It is mainly due to the large growth in consumer electronics, automotive interconnection, and communication interconnection." Looking forward to the full year, the company expects to continue its performance growth, with net profit attributable to shareholders of listed companies ranging from 10.77 billion yuan to 11.22 billion yuan, a year-on-year increase of 17.5% to 22.5%.
In addition, it is worth noting that on the evening of October 22, Luxshare Precision released a record of investor relations activities. In response to investors' questions about "the company's views on the regional distribution of the future supply chain and the competitive landscape," Wang Laichun, chairman and general manager of Luxshare Precision, said: "Although the production capacity of some products will need to be distributed globally due to geopolitical reasons, no matter where the industrial chain is transferred, we always believe that under the premise of complying with laws and regulations, as long as you are good enough and can show a more valuable side in the industry, the market will need you."
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