Apple iPhone maker Foxconn is betting big on electric cars and redrawing some of its supply chains as it navigates a new era of icy Washington-Beijing relations.
In an exclusive interview, chairman and boss Young Liu told the Ocean News what the future may hold for the Taiwanese firm.
He said even as Foxconn shifts some supply chains away from China, electric vehicles (EVs) are what will drive its growth in the coming decades.
As US-China tensions soar, Mr Liu said, Foxconn must prepare for the worst.
“We hope peace and stability will be something the leaders of these two countries will keep in mind,” 67-year-old Mr Liu told us, in his offices in Taipei, Taiwan’s capital.
“But as a business, as a CEO, I have to think about what if the worst case happens?”
The scenarios could include attempts by Beijing to blockade Taiwan, which it claims as part of China, or worse, to invade the self-ruled island.
Mr Liu said “business continuity planning” was already under way, and pointed out that some production lines, particularly those linked to “national security products” were already being moved from China to Mexico and Vietnam.
He was likely to be referring to servers Foxconn makes that are used in data centres, and can contain sensitive information.
Foxconn, or Hon Hai Technology Group as it is officially known, started off in 1974, making knobs for TVs. Now it is one of the world’s most powerful technology companies, with an annual revenue of $200bn (£158.2bn).
It is best known for making more than half of Apple’s products – from iPhones to iMacs – but it also counts Microsoft, Sony, Dell and Amazon among its clients.
For decades, it has thrived on a playbook perfected by multinational corporations – they design products in the US, manufacture them in China and then sell them to the world. That is how it grew from a small component-making business to the consumer electronics giant it is today.
But as global supply chains adjust to souring ties between Washington and Beijing, Foxconn finds itself in an unenviable spot – caught between the world’s two biggest economies, the very nations that have powered its growth until now.
The US and China are at loggerheads over many things, from trade to the war in Ukraine. But one of the biggest potential flashpoints is Taiwan, where Foxconn is headquartered.
That expertise is also what Mr Liu is hoping will fuel Foxconn’s next big bet: electric cars.
“Look at this – this is a big iPhone, so we’re very familiar with this,” he said, pointing to a panel that controlled the car he had taken us for a drive in.
Built for families and priced for an aspiring global middle class, the shiny white SUV is one of several models manufactured by Foxconn.
“The reason why we think this is a great opportunity for us is that with the traditional gas engine, you have engines which are mostly mechanical. But with EVs, it’s batteries and motors,” he explains.
That is a familiar language for a technology company like Foxconn, he added.
Foxconn’s hopes to capture about 5% of the global electric vehicle market in the next few years – an ambitious target given the firm has only made a handful of models so far. But it is a gamble that Mr Liu is confident will pay off.
“It doesn’t make sense for you to make [EVs] in one place, so regionalised production for cars is very natural,” he added. Foxconn car factories will be based in Ohio in the US, in Thailand, Indonesia and perhaps even in India, he said.
For now, the company will keep focusing on what it does best – making electronic products for clients. But perhaps not too far in the future, Foxconn will start selling its own cars.
Either way, with the foray into electric cars, Foxconn is diversifying not just production but also supply lines – both of which, Mr Liu believes, hold the key to the company’s future.