Foxconn building Shanghai HQ, aims at China market

May 10, 2012 By ELAINE KURTENBACH , AP Business Writer

(AP) -- Foxconn Technology Group, the world's biggest assembler of consumer electronics, began work Thursday on a Shanghai headquarters that it says will help spearhead its efforts to sell more in the China market.

The groundbreaking by Foxconn for its new, 80,000 square meter (861,120 sq. feet) "crystal box" center in Shanghai's prime Lujiazui financial district reflects the company's shift toward sales and services, said company chairman Terry Gou.

"We are turning our export factories to be more domestic market oriented," Gou told a slew of Chinese and foreign dignitaries who turned out for the event. Chinese leaders had urged him, he said, "to use our technology, scale and quality to make better, more affordable products for ordinary consumers."

Taiwan's Hon Hai Precision Industry Co. owns the Foxconn factories in China that assemble about 40 percent of the world's electronics. It is a key producer of and iPhones for Apple Inc., the world's most valuable company.

Hon Hai's revenue totaled $116 billion last year, a 15 percent increase from 2010. Gou said he was confident the company would reach its "internal target" of growing revenue by at least 10 percent a year.

Foxconn employs about 1.2 million workers at low-wage factories in the southern Chinese city of and elsewhere in the country. Most still cannot afford the pricey and other gadgets they make.

Increasingly, though, China is viewing the low-cost export manufacturing that has transformed it in the past few decades as one that must change to a growth model based more on domestic demand.

Foxconn responded to a spate of suicides by employees in 2010 by more than doubling its basic monthly salary to 1,800 yuan ($290). It recently responded to pressure over labor conditions by pledging to limit working hours while raising hourly pay. The company has meanwhile been shifting its production away from its original base in the southern city of Shenzhen toward central and western regions of the country where labor costs are lower.

"We are doing our best to raise living standards by higher wages and improved benefits for our employees," Gou said.

"If our employees earn enough they can spend more money to increase domestic consumption," he said.

plans for its headquarters in Shanghai to offer services that will complement its push in the consumer electronics retail market and e-commerce, Gou said.

"We intend to dedicate a sizable space for our customers to display their products made for China," he said.

In March, Hon Hai said it was taking a 10 percent stake in Japan's struggling Sharp Corp. for about $806 million, hoping to counter growing competition from South Korea's Samsung Electronics Co.

Sharp, which makes flat-screen TVs and liquid crystal displays, and Hon Hai plan an alliance in LCDs and other electronics sectors to cut costs. Hon Hai also is keen to use Sharp's advanced technology to help integrate its production of iPads and other devices.

Explore further: Sony's quarterly loss balloons on mobile woes

1 /5 (2 votes)
add to favorites email to friend print save as pdf

Related Stories

Taiwan's Hon Hai looks to robot industry

Oct 31, 2011

The parent company of Taiwanese tech giant Foxconn plans to mass produce industrial robots as part of its efforts to cope with labour shortages and rising wages.

Hon Hai to hike salaries for Taiwan staff

Apr 05, 2012

Taiwan technology giant Hon Hai, which makes gadgets for Apple, said Thursday it would hike salaries for its Taiwan staff as prices on the island soar.

Parent of Taiwan's Foxconn reports profit drop

Oct 31, 2011

The parent of Taiwan technology giant Foxconn, which makes iPads and iPhones for Apple, said Monday its third-quarter profit dropped, with analysts pointing to the cost of moving factories in China.

Foxconn to give Chinese workers another pay raise

Jun 06, 2010

(AP) -- Foxconn workers in China will get another pay raise in coming months, on top of an increase that just took effect in response to recent worker suicides, the company said Sunday.

Foxconn to hike prices to cover China pay increase

Jul 22, 2010

(AP) -- Foxconn Technology Group, which makes iPhones and other gadgets for global technology companies, plans to charge them more to partly cover wage increases at its mammoth manufacturing compound in southern China.

Recommended for you

Sony's quarterly loss balloons on mobile woes

23 hours ago

Sony's losses ballooned to 136 billion yen ($1.2 billion) last quarter as the Japanese electronics and entertainment company's troubled mobile phone division reported huge red ink.

Will Apple Pay be mobile pay's kick-start?

Oct 30, 2014

If anyone can get us to use our smartphones as wallets, it's Apple. That's what experts think about the recent launch of Apple Pay, the first mobile wallet to work on an iPhone.

Google execs discuss regulation, innovation and bobble-heads

Oct 30, 2014

Eric Schmidt and Jonathan Rosenberg help run Google, one of the world's best-known, most successful - and most controversial - companies. They've just published a new book, "How Google Works," a guide to managing what they ...

LinkedIn reports 3Q loss but sales climb

Oct 30, 2014

LinkedIn Corp. posted a third-quarter loss on Thursday, but its results were better than expected as revenue grew sharply, sending shares of the online professional networking service higher in extended trading.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.