Taiwan presidential run by Terry Gou creates ‘uncertain’ future for Foxconn, analysts say

Foxconn chairman Terry Gou’s decision to make a run for Taiwan’s presidency creates “uncertainty” for the world’s largest iPhone assembler, and could threaten Apple’s long term relationship with the company, analysts have said.

The 68-year-old Gou, Taiwan’s richest man with a net worth of US$7.6 billion, said on Wednesday that he would take part in the opposition Kuomintang’s (KMT) primaries for the 2020 race to challenge current president Tsai Ing-wen.

In a statement, Foxconn said that Gou wished to “withdraw from daily operation” but will “continue to provide strategic direction and guidance”.

The price of shares in Foxconn Industrial Internet, Foxconn’s smart factory and cloud computing division, which was listed on the Shanghai Stock Exchange in 2018, soared for two consecutive days after Gou’s announcement. FIH Mobile Limited, a Hong Kong listed subsidiary of Foxconn, also soared for over 50 per cent on Thursday morning.

Mei Xinyu, a researcher of a think tank affiliated to China’s Ministry of Commerce, said Gou’s political bid has cast a “deep shadow of uncertainty” on Foxconn and the global electronic industry.

“Both camps in Taiwan have been trying to win support from Gou given his business power. But Gou is now a political game player, which will bring him and Foxconn much trouble. His political opponents will magnify all the flaws of Foxconn, which they probably used to cover for Gou,” Mei said.

Founded in 1974 in Taiwan, Foxconn began to invest in mainland China in 1988 and now has 45 factories scattered throughout mainland China. To date, it has over 200 representative offices and subsidiaries across Asia, Americas and Europe. In 2018, Foxconn achieved NT$5.2 trillion (US$168 billion) in revenue.