Foxconn plans to be a chip company

May 21, 2018 // By Peter Clarke
Terry Gou, the chairman of Hon Hai Precision Industries Co. Ltd. (Taipei, Taiwan), has confirmed that his company is planning to design and manufacture its own chips for use in industrial Internet of Things (IIOT) applications.

Hon Hai is the contract manufacturer better known as Foxconn. Foxconn makes products for Apple amongst others and is the world's tenth largest employer with 1.2 million employees.  and could probably afford to build its own wafer fab. The company is reported to have procured $40 billion worth of chips in a year, approximately 10 percent of global chip revenues.

However, for any company to enter chip manufacturing is now considered a long-term, phenomenally expensive and unlikely endeavour. So when Gou spoke of own manufacturing he may have meant that Foxconn would use foundries such as TSMC.

Last week Foxconn reported a diminished profit of NT$24.08 billion (about $800 million) on quarterly revenues of NT$1,029 billion (about $34.3 billion) for 1Q18. However, the declining profit and Apple's inability to expand sale of its iPhones gives good reason why Foxconn may wish to become more than just a contract manufacturer.

In a speech given at China's Tsinghua University Gou said industrial IoT would become a core focus for Foxconn. He also referenced investments by HCM Capital, the venture arm of Foxconn, into blockchain startups that will support blockchain-based supply chain finance and improve IoT device management.

Related links and articles:

www.foxconn.com

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