Although Foxconn is one of the largest 3rd party manufacturing operations in the world, Terry Gou’s company is on the verge of meltdown – trying to deal with the phenomenal demand for iPad 2 products from Apple customers. KitGuru considers the company’s plight.
While the company has struggled to promote its own brand products over the years, Foxconn manages to secure come of the best contracts to build high-quality products for other people.
Alongside the Kindle and iPhone, it has been the focus for Apple’s iPad 2 production.
Word reaching KitGuru from industry insiders, is that the PEAK daily output from Foxconn (if sustained – BIG if), would mean that Steve Jobs’ outfit would have increased demand PAST the 100 million units a year mark – and this is causing pure grief inside Foxconn.
While annual revenues of $59 Billion would be more than enough for most companies (it’s a level that Intel can only dream of) – the money flowing into Foxconn has dropped billions in recent years. There are also doubts about the company’s profitability during these troubled times.
Alongside the creation of ‘Foxconn City’ – which spans 3 square kilometres in Shenzhen and employs close to half a million workers – Foxconn also has a big stake in many of the companies which supply the plants. For example Hitachi Display in Japan (in which Foxconn invested more than $1Bn recently), which is one of the world’s largest suppliers of small to medium sized LCD panels.
KitGuru says: Right now, it seems that Foxconn is running at more than 100% effort to try and keep customers happy. Will this pressure create opportunities for other major manufacturers to produce from triple-A clients like Amazon and Apple?
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