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Foxconn faces biggest challenge in current Sino-US trade spat that it calls a tech war

Jun 22, 2018, 8:15 am

The ongoing trade conflicts between the governments of the US and China is the biggest challenge Foxconn is facing, and it is described by the company as a technology war rather than a trade battle.

At the annual general meeting of the company, Chairman Terry Gou said that in order to counter the pressures, their executives are making various plans. He did not reveal anything on these plans, though!

He did state that a tech war is equivalent to a manufacturing war. It is of no wonder how critical the company is in presently, it is the largest electronics contract manufacturer in the world.

Also, both the countries engaged in this trade spat are top export markets for Foxconn’s home, Taiwan. The war, if let evolved, can bring disruption in supply chains for technology and automotive industries, according to analysts.

These two sectors majorly depend on outsourced components like the ones supplied by Foxconn, which worries the company. Also, the Sino-US conflicts are trouble enough for derailing the global economic growth.

Last Wednesday, Foxconn’s shareholder adviser Hermes EOS asked for further details on the company’s plans to pass on to the investors. These plans include the succession of senior executives, and the company was additionally asked to consider separating roles of chairman and chief executive.

Gou already said that he is not retiring in the next five years, the tenure he emphasizes as being significant for the company.

Two other factors have kept Foxconn from progressing recently due to the war. Earlier this month saw China Labor Watch criticising the company for harsh working conditions. Gou said that issues related to this have been results of abiding by Chinese laws.

Secondly, Foxconn has its shares down 0.7% today, which is a process they should focus on containing as fast as possible.

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