Foxconn's Rise and Fall: From "OEM Empire" to Global Challenges

Foxconn's Rise and Fall: From "OEM Empire" to Global ChallengesFrom a small, obscure plastic manufacturing company to the world's largest electronics manufacturer, Foxconn's history is undoubtedly a business legend. The company's rise is inseparable from the vision and tireless efforts of its founder, Terry Gou

Foxconn's Rise and Fall: From "OEM Empire" to Global Challenges

From a small, obscure plastic manufacturing company to the world's largest electronics manufacturer, Foxconn's history is undoubtedly a business legend. The company's rise is inseparable from the vision and tireless efforts of its founder, Terry Gou. However, as Foxconn reached its peak, some of Gou's actions and remarks sparked widespread controversy, ultimately leading to the giant's downfall.

In 1985, Gou, with his keen market sense, transformed the small "Hon Hai Plastics" into Foxconn. During the rise of color TV, they decisively shifted to producing components for PCs and video games, seizing market opportunities quickly. In 1988, Gou decided to set his sights on mainland China, establishing the first factory in Shenzhen. This decision undoubtedly opened a door to glory for Foxconn. With its outstanding production capabilities and strict quality control, Foxconn soon became the primary contract manufacturer for global giant Apple. As iPhone sales skyrocketed, Foxconn's output also surged. Their factories in mainland China provided millions of jobs and received strong support from local governments. This "having it all" sensation made Gou appear exceptionally confident in the media.

However, at the height of Foxconn's success, Gou's remark "feeding mainland China" sparked widespread dissatisfaction. People felt that the entrepreneur completely disregarded the numerous preferential policies the Chinese government provided for Foxconn's development and instead attributed his achievements to "feeding". This "ungrateful" approach plunged Foxconn into a vortex of public opinion.

In 2018, with the escalation of the US-China trade war, Foxconn once again became the center of attention. This time, Gou chose to side with the US, attempting to build factories in America. This decision was undoubtedly a betrayal of the Chinese market. However, in the United States, Foxconn encountered numerous difficulties. Differences in the labor market, work attitudes of workers, and other issues bogged down Foxconn's plans. Despite Gou's promise of significant investment, ultimately, it was only a "hollow victory".

While Foxconn faced setbacks in the US, their investments in India also failed to meet expectations. Although India's labor costs were lower, due to cultural and educational gaps, worker efficiency was far lower than expected. Product quality issues even arose, with iPhones manufactured in India being found to exceed "E. coli limits" during testing, undoubtedly delivering a heavy blow to Foxconn.

Today, Foxconn is in a very awkward position. In the Chinese market, they face increasingly fierce competition from domestic companies. Overseas, they have suffered repeated setbacks. Whether Gou will realize the price of his "betrayal" and return to the Chinese market has become a major question.

Foxconn's story is not only the rise and fall of a company but also a profound reflection on the development of China's manufacturing industry. How did this once-mighty giant reach its current state?

From Foxconn's development journey, its success lies in grabbing market opportunities and becoming a primary contract manufacturer for global brands through its production capabilities and quality control. This undoubtedly benefited greatly from the strong support of the Chinese government in terms of taxes, land, and other areas. However, at the peak of its success, some of Gou's remarks sparked controversy. He attributed Foxconn's achievements entirely to "feeding", completely ignoring the Chinese government's support. This "ungrateful" approach was undoubtedly disrespectful to its partner.

As the US-China trade war loomed, Foxconn's fate began to change. Gou chose to side with the US, attempting to build factories in America, which was undoubtedly a betrayal of the Chinese market. However, Foxconn encountered numerous difficulties in the United States. Differences in the labor market, work attitudes of workers, and other issues bogged down their plans. Despite promising significant investment, it was ultimately only a "hollow victory".

While Foxconn faced setbacks in the US, their investments in India also failed to meet expectations. Although India's labor costs were lower, due to cultural and educational gaps, worker efficiency was far lower than expected. Product quality issues even arose, undoubtedly delivering a heavy blow to Foxconn.

Today, Foxconn is in a very awkward position. In the Chinese market, they face increasingly fierce competition from domestic companies. Overseas, they have suffered repeated setbacks. Whether this once-mighty giant will realize the price of its "betrayal" and return to the Chinese market has become a major question.

Foxconn's story undoubtedly provides profound insights into the development of China's manufacturing industry. Business success relies on respecting the market and being sincere towards partners. Only by truly understanding and respecting the local market can companies achieve sustainable development. At the same time, government support is a key factor in business success. Foxconn's experience also reminds us that even once-mighty giants need to maintain humility and vigilance.

Let us together pay attention to Foxconn's future direction and discuss new opportunities for the development of China's manufacturing industry.

While Foxconn dominated the Chinese market, Gou also began his global expansion plan. In 2018, with the escalation of the US-China trade war, Foxconn once again became the center of attention. This time, Gou chose to side with the US, attempting to build factories in America.

Industry insiders questioned this decision. Foxconn, as a representative of China's manufacturing industry, choosing to abandon the Chinese market and turn to the US was undoubtedly disrespectful to the Chinese government. After all, it was the Chinese government's preferential policies over the years that allowed Foxconn to rise so rapidly in mainland China.

However, Foxconn encountered numerous difficulties in the United States. Differences in the labor market, work attitudes of workers, and other issues bogged down Foxconn's plans. Despite Gou's promise of a massive $10 billion investment and 13,000 jobs, it ultimately amounted to an empty gesture.

The main reason lies in the unique nature of the US labor market. Influenced by the "freedom and democracy" spirit, most Americans are unwilling to endure the monotonous life of assembly lines. Despite Foxconn continuously increasing wages, they still couldn't attract enough workers. This resulted in Foxconn's US factories perpetually failing to achieve their expected capacity and efficiency.

While Foxconn faced setbacks in the US, their investments in India also failed to meet expectations. In 2019, Gou personally visited India to discuss establishing a factory there. For this tycoon, India undoubtedly presented a market filled with opportunities. With its cheap labor costs, Foxconn could potentially gain more profit margins there.

However, Foxconn also faced numerous difficulties in India. Although recruiting workers was not difficult, due to cultural and educational gaps, worker efficiency was far lower than expected. Product quality issues even arose, with iPhones manufactured in India being found to exceed "E. coli limits" during testing, undoubtedly delivering a heavy blow to Foxconn's reputation.

After a series of setbacks, Foxconn's situation became increasingly awkward. Faced with increasingly fierce competition in China, they had to reconsider their development strategy. Domestic car companies like BYD and Chery, with government support, were gradually seizing Foxconn's original market share, undoubtedly putting enormous pressure on this once-mighty giant.

At the same time, Foxconn's position in China began to decline. Gou's past remark "feeding mainland China" severely damaged the company's image in the Chinese market. People started questioning whether Foxconn truly respected the Chinese market and whether it truly appreciated the support of the Chinese government.

Against this backdrop, whether Foxconn will return to the Chinese market has become a major question. After all, China boasts a complete industrial system and a vast consumer market, essential resources for any manufacturing company.

Industry insiders have varying opinions on Foxconn's future. Some believe that after a series of setbacks, Gou will inevitably realize the price of his "betrayal" and actively return to the Chinese market. After all, Foxconn's success is inseparable from the strong support of the Chinese government.

However, others believe that Gou's personality makes it difficult for him to genuinely recognize his mistakes. The entrepreneur has always been self-assured, and during Foxconn's glory days, he openly claimed "feeding mainland China". This "ungrateful" behavior was undoubtedly disrespectful to the Chinese government.

In the context of the US-China trade war, Foxconn choosing to side with the US was undoubtedly a betrayal of the Chinese market. Even with investment plans in the US and India facing setbacks, Gou has not shown any remorse. Instead, he has persisted in his approach, seeking opportunities in other countries. This stubborn approach has undoubtedly pushed Foxconn into an even more difficult situation.

Faced with increasingly fierce domestic competition and repeated setbacks overseas, this once-mighty giant is gradually losing its leading position.

For Gou, whether he will regret his actions has become a major question. After all, Foxconn's fate is closely linked to his personal decisions. If he can truly recognize his mistakes and actively return to the Chinese market, he may still have a chance to turn things around. But if he continues to stagnate, Foxconn's future is likely to become increasingly uncertain.

No matter what...

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