Foxconn’s Transformation: A View from the Boardroom

It has been about one year since I stepped down from the board of Hon Hai Technology Group ( 富士康 ), the world’s largest technology manufacturer responsible for global household devices that power our everyday lives.

During my three-year term as an independent director of Foxconn, I saw major changes within the company as it faced various external shocks such as the pandemic and global supply chain relocation. Against that backdrop, the company accomplished a number of remarkable achievements:

Completed the transition from a founder-run business to an institutionalized, professionally-managed organization

The company was founded in 1974 by the charismatic Mr Terry Gou, who ran the organization for over four decades and built it into a leading global technology company. In 2019, the leadership of the company transitioned to Mr Young Liu, who was previously the head of Foxconn’s semiconductor business unit. Many companies do not survive the succession transition. Yet Foxconn, because of the tight coordination between Terry and Young as well as the commitment and support of the senior management team, has been able to achieve a smooth transition. Between 2020 and 2022, the company continued to grow rapidly with revenue and net profit growing by 11% and 18% p.a., respectively, highlighting the transition’s success.

Implementing a coherent and forward-looking strategic roadmap

Foxconn was heavily reliant on a group of customers, especially in consumer electronics. To diversify and unlock the next level of growth, the team, led by Young, has articulated and is now implementing a coherent “3+3” transformation growth plan, emphasizing electric vehicles, digital health, and robotics industries, along with artificial intelligence, semiconductors, and next-generation communication technologies (e.g., 5G) as building blocks in the company’s technology strategy. This strategic direction has resonated with the investment community, with the stock price of the group’s main listed company, Hon Hai Precision Industry, increasing by approximately 50% over the last four years, outperforming comparable global technology benchmarks.

Strengthening emphasis on sustainability

Foxconn recognizes the importance of sustainable practices, and has set long-term objectives such as achieving net zero emissions by 2050, generating at least 50% of its energy from green sources by 2030, reducing greenhouse emissions by 63% from 2020 levels by 2035, and recycling 60% of plastic across all sites worldwide. The company is already adopting solar power and setting up monitoring systems for industrial wastewater discharge and air quality in its factories.

In conclusion, my experience at Foxconn was incredibly rewarding. Witnessing the company’s achievements in terms of institutionalization, strategic transformation, and sustainability during a short time span was inspiring. I wish the Foxconn team’s continued success in its remarkable journey.