On April 15, 2019, Terry Gou, founder and chairman of Foxconn, announced that he will be stepping down from his role in the coming months. First reported by Reuters, Gou plans to distance himself from the day-to-day operations of company, but still be an influence and voice in its major decisions. As of writing, there are no details on who Gou plans to have take his role at the helm. When asked why he was abdicating, he said that this was part of his vision: “That’s the goal I set up – to let young people learn sooner and take over sooner and to replace my position sooner.” The change of leadership comes at a critical time for Foxconn. With sales of smartphones plateauing as consumers decide to wait longer and longer before trading in their phones, Foxconn is attempting to pivot from its reliance on mobile sales.
Unless operating in the trenches, Foxconn is one of those company names that is tossed around whenever events like MWC or CES comes around and when monoliths of consumer electronics like Samsung and Apple present their flagship announcements. The truth is that Foxconn is one of the silent monoliths of the tech industry. Since founded by Gou in 1974 and the opening of its first manufacturing plant in 1988, Foxconn has become the world’s largest provider of electronics manufacturing services and the fourth largest IT company by revenue. It is the single largest private employer in Taiwan, where it is based, and one of the largest employers worldwide with 1.3 million global employees as of May of 2018. It has been responsible for the last two generations of gaming consoles, as well as many forms of handheld media: BlackBerry, iPad, iPhone, iPod, Kindle, Nintendo, Nokia, and Xiaomi. It is estimated that as of 2012, Foxconn had control of 40% of the market share of all consumer electronics sold worldwide. The graph to the right shows that Foxconn has experienced growth for nearly 15 years, keeping track with the larger technology economy. On average, revenue has grown by $12.248 billion every year.
All of this is to show that Foxconn is company that should be on the forefront of people’s minds. With the stepping down of Terry Gou, a power vacuum is being created in the technology environment. The Board of Directors and Gou have expressed they will try to have a coordinated transition of power by working together moving forward. In addition, basic economic theory dictates that the leaders at Foxconn will do what is in the best interest of the company and the company’s revenue. These two things aside, whoever takes the place of Terry Gou will not be Terry Gou, will not have his ideals and modus operandi. This could be good news for Foxconn and consumers if after the power switch, the company focuses on addressing the working conditions and suicides at its factories. The new head could also prioritize the construction of the Wisconsin plant that earned the company $4.5 billion in a subsidy package. It could also be bad news due to the sheer power and market share that Foxconn controls. Keep an eye on the direction that Foxconn is heading in the coming months and stay tuned for the announcement slated for June at the company’s AGM.