Eoin Treacy's view -
The billionaire however focused primarily on Hon Hai’s plans for the longer term. Apple’s main manufacturing partner, which does most production in China, makes everything from smartphones to PCs with a growing clout that has seen it courted by governments around the world.
Gou promised to ramp up investment in the U.S., possibly helping with a rust-belt economic revival. Dubbed “Flying Eagle,” Foxconn’s plan to build a U.S. facility could create tens of thousands of American jobs during Trump’s first year in office. The company is considering a joint investment with Sharp, but details have yet to be hammered out.
In the nearer term, Hon Hai’s shares are riding high as Apple prepares to unveil its latest iPhone -- one of the most- anticipated devices of 2017. The shares closed little changed in Taipei after reaching a record earlier this week.
Hon Hai reported first-quarter earnings short of estimates after a stronger Taiwan dollar squeezed profit in the lull before the new iPhone. That came after a year in which smartphone shipments grew at their slowest pace on record and PC demand continued to flounder. In 2016, Hon Hai’s sales fell 2.8 percent while net income rose just 1.2 percent. Gou said Thursday that revenue and profit this year would be better.
Over the longer term, Gou is re-tooling Foxconn for the future, installing robots to offset rising labor costs in China.
It’s also investing in emergent fields from virtual reality to artificial intelligence.
Hon Hai makes a wide range of electronic devices from HP laptops and Xiaomi handsets to Sony PlayStation game consoles.
But Apple is by far its most important client, yielding roughly half the company’s revenues.
Foxconn employs 1 million people in China but is also one of the largest investors in robotic technology to try and mitigate its reliance on human labour. Any factory built in the USA will likely employ a lot of people in the construction phase but will be highly automated to control headcount.
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