Foxconn

Based on Wikipedia: Foxconn

Somewhere in China, there's a factory complex with its own television network, four swimming pools, a fire brigade, and a hospital. It covers about three square kilometers—roughly the size of a small town—and at any given moment, somewhere between 230,000 and 450,000 people work there. The walls encircling this industrial city-within-a-city have earned it a nickname: Foxconn City.

This is the beating heart of the consumer electronics you touch every day.

That iPhone in your pocket? Probably assembled here, or at the company's other major facility in Zhengzhou—a campus so dominated by Apple production that workers call it "iPhone City." Your Nintendo Switch, your PlayStation, your Kindle, your Google Pixel? All of them likely passed through Foxconn's hands. As of 2012, the company manufactured an estimated forty percent of all consumer electronics sold worldwide. The actual number today remains difficult to pin down, but Foxconn's dominance has only grown.

The Name Behind Every Brand

Here's something curious: you've almost certainly never bought a Foxconn product. The company doesn't sell anything directly to consumers. Instead, it operates as what the industry calls a "contract manufacturer"—a company that builds products designed and sold by others.

Think of it like this. Apple designs the iPhone and markets it to you. Foxconn actually puts the thing together. Same story for Microsoft's Xbox, Amazon's Kindle, Sony's PlayStation, every Nintendo console since the GameCube, most BlackBerry devices, Nokia phones, Cisco networking equipment, Xiaomi smartphones, and Google's Pixel line. When you buy from these brands, you're getting a product that Foxconn's workers physically assembled.

This business model makes Foxconn simultaneously invisible and inescapable. The company's formal name is Hon Hai Precision Industry Co., Ltd., and it goes by different names in different places—Hon Hai Technology Group in Taiwan, Foxconn Technology Group in mainland China, and simply Foxconn internationally. Whatever you call it, the company has grown into one of the largest employers on Earth, with 137 campuses and offices spread across 24 countries.

From Electrical Components to Global Behemoth

The story begins in 1974, when a Taiwanese businessman named Terry Gou founded Hon Hai Precision Industry as a manufacturer of electrical components. The company started small, making parts rather than finished products.

The first major expansion came in 1988, when Foxconn opened its first manufacturing plant in Longhua Town, Shenzhen. This was prescient timing. China was just beginning to open its economy to foreign investment, and Shenzhen—a fishing village transformed almost overnight into a Special Economic Zone—would become the epicenter of global electronics manufacturing.

The real breakthrough came in 2001. Intel, the American semiconductor giant, had been working with Asus to manufacture its Intel-branded motherboards. That year, Intel switched to Foxconn. This wasn't just another contract—it was validation from one of the most important companies in computing that Foxconn could handle complex, high-volume manufacturing to exacting standards.

From there, the company's growth accelerated. By 2012, Foxconn operated twelve factories in nine Chinese cities and accounted for roughly forty percent of worldwide consumer electronics production. By 2023, annual revenue had reached 6.16 trillion New Taiwan dollars—equivalent to about 198 billion U.S. dollars. That figure placed Foxconn twentieth on the Fortune Global 500, a ranking of the world's largest companies by revenue.

The Geography of Assembly

Understanding Foxconn requires understanding where things get made and why.

China remains the center of gravity. The Longhua Science and Technology Park in Shenzhen—that walled campus with its own TV station—is the flagship facility, but it's far from the only one. The Zhengzhou Technology Park in Henan province, home to iPhone production, employed 120,000 workers as of 2012 and grew to 200,000 by late 2022. Additional facilities operate or are planned in Wuhan, Kunshan, Tianjin, Beijing, Huizhou, and Guangzhou.

But the geography is shifting.

India has become increasingly important. As of late 2023, Foxconn had three manufacturing plants under construction in southern India: a component and semiconductor facility near Chennai, and two plants in Bangalore and Hyderabad for making iPhones, iPads, iPods, and AirPods. The company projects these facilities will collectively employ around 400,000 people within their first five years of operation. In November 2023, Foxconn announced a 1.54 billion dollar investment in the country.

The rationale is straightforward. India offers lower labor costs, a growing domestic market, and—crucially—geographic diversification away from China. For Foxconn's clients like Apple, spreading production across multiple countries reduces risk from any single source of disruption, whether that's a pandemic, a trade war, or political tensions.

Brazil hosts all of Foxconn's South American operations, with mobile phone factories in Manaus and Indaiatuba, plus production bases in several other cities. In Europe, the company operates facilities in Hungary, Slovakia, and the Czech Republic—as of 2011, it was the second-largest exporter in the Czech Republic. Mexico hosts factories in Chihuahua, Juárez, and Tijuana, manufacturing everything from computers to mobile phones to set-top boxes to LCD televisions.

The Sharp Acquisition: When Honor Matters

One of the more revealing episodes in Foxconn's history involves its acquisition of Sharp Corporation, the Japanese electronics company.

The relationship began in 2012, when Foxconn acquired a ten percent stake in Sharp for 806 million dollars and agreed to purchase up to half the LCD panels produced at Sharp's plant in Sakai, Japan. But Sharp's financial situation kept deteriorating. Its share price plunged, and the original deal fell apart.

By February 2016, Sharp was desperate. The company accepted a 700 billion yen takeover bid from Foxconn—about 6.24 billion dollars—for over 66 percent of Sharp's voting stock. Then came a problem. Sharp's legal representatives disclosed previously undisclosed liabilities. Foxconn's board of directors halted the deal.

What happened next reveals something about Terry Gou's character—or at least his public persona. According to accounts of the negotiations, the former Sharp president wanted to proceed despite the complications. Gou picked up a marker and wrote a single Chinese character on the whiteboard: 義.

The character means "righteousness."

Gou said Foxconn should honor the deal. A month later, the acquisition was finalized—though at a reduced price that accounted for the newly disclosed liabilities. The final transaction closed in August 2016 for 3.8 billion dollars.

The Wisconsin Saga

If the Sharp acquisition shows Foxconn's ambitions in Asia, the Wisconsin project reveals the complications of expanding into the United States.

In July 2017, Foxconn announced plans to build a ten billion dollar television manufacturing plant in southeastern Wisconsin. The promise was bold: 3,000 jobs initially, scaling to 13,000. Wisconsin's government, under then-Governor Scott Walker, offered incentives ranging from three to 4.8 billion dollars in subsidies—paid incrementally if Foxconn met hiring and investment targets. This would be the largest subsidy ever given to a foreign firm in American history.

The announcement generated both excitement and skepticism. Boosters projected that Foxconn would contribute 51.5 billion dollars to Wisconsin's economy over fifteen years. Critics pointed out that Foxconn had made similar job-creation promises in other countries that never materialized.

Environmental concerns added to the controversy. Governor Walker exempted Foxconn from filing an environmental impact statement, drawing criticism from environmentalists worried about air pollution. The company received permission to draw 26,000 cubic meters of water daily—about seven million gallons—from Lake Michigan. Foxconn agreed to invest thirty million dollars in zero liquid discharge technology and to restore two acres of wetland for every one acre disturbed, a higher ratio than required of other companies.

President Trump attended the groundbreaking ceremony in June 2018, promoting the project as a symbol of American manufacturing revival.

Then reality intervened.

By January 2019, Foxconn announced it was reconsidering plans to manufacture LCD screens at the Wisconsin plant, citing high American labor costs. The pandemic further disrupted plans. In April 2021, Foxconn and Wisconsin reached a new agreement: the company would invest 672 million dollars—a fraction of the original ten billion—and create 1,454 jobs. Available tax credits were reduced to eight million dollars.

The Wisconsin story illustrates a tension at the heart of Foxconn's business model. The company's competitive advantage stems partly from operating in regions with lower labor costs. Bringing that model to high-wage countries like the United States requires either significant automation or acceptance of smaller profit margins. Neither is simple.

The Human Cost

Any honest account of Foxconn must address working conditions.

The company's massive Chinese facilities have drawn repeated scrutiny over labor practices. The sheer scale of operations—hundreds of thousands of workers in a single location—creates challenges in maintaining humane conditions. Workers at some facilities live in dormitories on campus, blurring the line between workplace and home.

In May 2016, the BBC reported that Foxconn had replaced 60,000 employees with automated systems. The company confirmed the report. From one perspective, this represents progress—fewer workers performing repetitive assembly tasks. From another perspective, it highlights how little leverage individual workers have in negotiating with a company that can replace them with machines.

The most dramatic recent conflict erupted in late 2022 at the Zhengzhou facility. In October, a COVID outbreak prompted Foxconn to impose restrictions, closing dine-in meal facilities. By late October, policies intended to control the outbreak prevented workers from leaving the complex. Videos emerged of workers jumping fences to escape.

On November 2nd, Chinese authorities imposed a lockdown on the Zhengzhou Airport Economy Zone surrounding the Foxconn factory. Three weeks later, workers clashed with law enforcement. The grievances were multiple: harsh COVID restrictions and claims that Foxconn had failed to deliver salary packages promised to new hires. Videos circulated on Chinese social media showing law enforcement beating protesters, and large crowds of workers fighting back.

The Semiconductor Pivot

In July 2019, Foxconn underwent a leadership transition. Terry Gou stepped down as chairman, replaced by Young Liu—previously Gou's special assistant and head of the company's semiconductor business group.

The choice of successor was telling. Analysts interpreted Liu's appointment as a signal of Foxconn's future direction: a pivot toward semiconductors, artificial intelligence, robotics, and autonomous driving. The context was the maturation of Foxconn's core smartphone assembly business. Building iPhones had made Foxconn enormous, but smartphone sales growth was slowing globally. Future growth would require new capabilities.

This explains Foxconn's various moves into adjacent industries. In 2016, the company partnered with Tencent and luxury car dealer Harmony New Energy Auto to found Future Mobility, a startup aiming to produce fully autonomous electric vehicles. In October 2021, Foxconn completed a 250 million dollar deal to acquire a former General Motors plant from Lordstown Motors, positioning itself as a contract manufacturer for electric vehicles—essentially applying the smartphone assembly model to cars.

The semiconductor ambitions have proven more complicated. In September 2022, Foxconn signed a deal to build a semiconductor plant in Gujarat, India, in partnership with the Vedanta Group, with a projected investment of 21 billion dollars. Less than a year later, in July 2023, Foxconn withdrew from the project, citing issues with Vedanta as well as external factors. The retreat highlighted how difficult it is to replicate the semiconductor manufacturing capabilities concentrated in Taiwan, South Korea, and a handful of other locations.

COVID and Crisis Response

The pandemic revealed both Foxconn's vulnerabilities and its adaptability.

On February 5th, 2020—during Chinese New Year and at the height of the initial COVID outbreak—Foxconn began producing medical masks and protective clothing at its Shenzhen factory. The company initially said masks would be for internal employee use, a reflection of the desperate global shortage.

The pandemic's impact on Taiwan created an unusual role for Foxconn. Taiwan struggled with vaccine shortages through much of 2020 and into 2021, unable to secure supplies through normal government channels due to China's objections to Taiwan dealing directly with foreign governments. In June 2021, Taiwan's government agreed to allow Terry Gou, through his Yongling Foundation charity, to negotiate vaccine purchases on the island's behalf.

The following month, Foxconn and Taiwan Semiconductor Manufacturing Company (TSMC)—the world's most advanced chipmaker—announced they had jointly agreed to purchase ten million doses of the BioNTech COVID vaccine from Germany for donation to Taiwan's vaccination program. Each company committed to buy five million doses for up to 175 million dollars.

The episode illustrated something beyond crisis response. It showed how Taiwan's major technology companies—officially private enterprises but deeply intertwined with the island's identity and security—could step into quasi-governmental roles when formal diplomatic channels were blocked.

The Invisible Infrastructure of Modern Life

Foxconn occupies a strange position in the global economy. The company is simultaneously essential and invisible, building the devices that define modern life while remaining unknown to most consumers.

Consider the supply chain implications. When you buy an iPhone, you're participating in a manufacturing ecosystem that spans continents. Apple designs the device in California. Various components come from suppliers in dozens of countries—memory chips from South Korea, camera modules from Japan, rare earth elements from China. Foxconn assembles everything into the finished product, primarily in China but increasingly in India and Vietnam.

This system delivers remarkable efficiency. Foxconn can manufacture at scales and costs that individual brands could never achieve on their own. The specialization allows Apple to focus on design and marketing while Foxconn focuses on production.

But the system also creates dependencies and risks.

The concentration of manufacturing in a single company—and predominantly in a single country—means disruptions ripple through the global economy. When COVID outbreaks hit Foxconn's Zhengzhou facility, iPhone production dropped. When trade tensions rise between the United States and China, every company relying on Foxconn's Chinese factories faces uncertainty.

This explains the push toward geographic diversification. It also explains why Foxconn's expansion into India, its troubled Wisconsin project, and its various attempts to move up the value chain toward semiconductors all matter beyond the company's own business interests. The geography of electronics manufacturing is the geography of global power.

The Meta Connection

Foxconn's centrality becomes especially relevant as technology companies pursue ambitious new hardware categories like augmented reality glasses and virtual reality headsets.

Meta, the company formerly known as Facebook, has staked its future on what Mark Zuckerberg calls the "metaverse"—immersive digital environments accessed through AR and VR devices. Building these devices at scale requires exactly the kind of manufacturing expertise Foxconn possesses. The contract manufacturing model that assembled billions of smartphones could, in theory, assemble billions of AR glasses.

But new product categories create new dependencies. Components for AR glasses differ from smartphone components. Supply chains must be built or adapted. And any company hoping to reduce reliance on Chinese manufacturing faces the reality that alternatives take years to develop.

When Meta recently paused the international rollout of its Ray-Ban Display AR glasses due to component shortages, it highlighted how even the largest technology companies remain constrained by physical manufacturing realities. The digital future runs on physical hardware. That hardware has to come from somewhere.

For now, that somewhere is often Foxconn.

Looking Forward

Foxconn's trajectory over the next decade will be shaped by several forces.

First, the relationship between the United States and China. As tensions persist, pressure will grow on technology companies to diversify supply chains away from China. Foxconn's investments in India, Vietnam, and other locations position it to benefit from this shift—but shifting manufacturing is slow and expensive.

Second, the transition to electric vehicles and autonomous driving. Foxconn's move into vehicle manufacturing represents a bet that the contract manufacturing model can work for cars as it has for phones. If successful, this could open an enormous new market. If not, it represents a costly distraction from the core business.

Third, the semiconductor competition. Advanced chip manufacturing is concentrated in Taiwan and South Korea. Foxconn's attempts to enter this space have met obstacles, but the strategic importance of semiconductors makes continued efforts likely.

Fourth, automation. Foxconn has already replaced tens of thousands of workers with machines. This trend will accelerate. The company's competitive position depends partly on labor cost advantages, but those advantages erode as automation improves. Foxconn must stay ahead of this curve.

Finally, there are the workers. Hundreds of thousands of people labor in Foxconn facilities, assembling the devices that connect the rest of us. Their conditions, their wages, their treatment during crises like the pandemic—these questions don't appear in quarterly earnings reports, but they matter.

The electronics in your pocket passed through human hands. Most of those hands belong to someone who works at Foxconn.