The decision of Foxconn to enter the semiconductor manufacturing market gives additional heft to the premise that the US created a monster determined to swallow everything in its path.
As reported by Nikkei Asian Business today, Foxconn is working on a potential joint venture with its Sharp subsidiary to “invest” as much as $9 billion in the new plant, which would be the company’s first foray into IC development. (We put “invest” in quotes, because 1. the gulf between Foxconn’s reported investments and its actual investments tends to be oceanic in size and 2. in this case, the investment is reportedly coming from the Chinese government.)
Foxconn already is likely the world’s largest consumer of chips, so getting into the OEM business would cause reverberations among its major suppliers. Moreover, it returns us to the sad refrain: What is Foxconn’s end-game? The company dominates the electronics supply chain from boards to assemblies to box build, makes other components (connectors, displays, motherboards, etc.),
operates retail stores, invests in 5G … you name it.
Personally, I blame Steve Jobs. The iPhone was a revelation, for which Jobs deserves every ounce of credit he has received. But in looking for assemblers, he could and should have looked further than Foxconn. There simply is no major company in the electronics industry today that is more aggressive and yet has a worse record of worker treatment than Foxconn. I’ve worked in the industry since 1991. Foxconn remains the only company that I’ve ever received direct complaints from its employees about their treatment. (And that came from US workers. I can only imagine what their Chinese counterparts might say.)
And yes, I realize it was Michael Dell, not Jobs, who gave Foxconn and Terry Gou its entry into the US computer industry. But it was Apple that gave Foxconn its biggest stage, boosting the Taiwanese company from a third-party motherboard maker to a partner in the most revolutionary electronics device the world had seen to that point.
When criticized for his reliance on Foxconn, Jobs would fire back that the US didn’t have the engineers to build what Foxconn could build. But I don’t think it was an issue of talent, or availability. I think it was an issue of greed. Jobs couldn’t acquire the volume of talent needed at the price he wanted. Foxconn could.
And so that’s Steve Jobs legacy. Foxconn is a $150 billion company and growing. Its revenues are larger than any of its customers. And, being traded on the Taiwan Exchange, it has access to financial markets without the transparency of public companies in the US or Europe. A monster is present among us, and will eventually devour us all.