In Hon Hai Plans to Set Up Shipping Center in Kaohsiung and Hon Hai Continues to Invest we noted Hon Hai's active commitment to investing in Taiwan. Most of these investment plans have apparently come about due to a relaxation in cross-straits relations and investment legislation as it pertains to China. The India Times Info Tech has more details on the proposed investments.
Hon Hai Precision Industry Co, the world's largest contract electronics manufacturer, will sell shares in its overseas units in Taiwan and create 30,000 new jobs on the island.
Hon Hai will also develop a new town to house 240,000 residents and set up an Asian logistics centre in Kaohsiung in southern Taiwan, Terry Gou, the company's chairman and founder, told a press conference.
Hon Hai, with sales of NT$1.7 trillion ($52 billion) last year, makes Apple Inc iPods and Dell Inc computers at plants in China. Gou signed an agreement in June to invest in Kaohsiung, including hiring 3,000 software engineers over five years.
The investment in the new town will total NT$100 billion ($3.3 billion), Gou said today. He declined to name which units may list in Taiwan or give a timeframe for the plans.
Foxconn International Holdings Ltd, Hon Hai's 72 per cent owned mobile phone-making unit, has plunged more 70 per cent from its high of HK$23.25 on October 3 last year to HK$6.80 in Hong Kong yesterday.
Taiwan's Cabinet said on July 31 stated that it will scrap a rule banning companies with Chinese investors from selling shares on the island's stock exchanges as part of President Ma Ying-jeou's pledge to ease restrictions on cross-strait trade and investment.
Although Mr. Gou has not said explicitly that Foxconn will relist in Taiwan, Reuters quotes the on-island Commercial Times saying:
One of the initiatives would see the company's cellphone unit, Hong Kong-listed Foxconn International (2038.HK: Quote, Profile, Research, Stock Buzz), return to Taiwan to make a listing on the local stock exchange, the Commercial Times reported.
Foxconn previously confirmed it was planning such a move, but said details were still being worked out.
This investment is not small change. It is significant! One wonders where Mr. Gou was during the past eight years and if this move is driven by political relationships (this is mere speculation). My main problem with this is that businessman should make business decisions, not political ones. If the Kuomingtang and Mr. Gou really cared about the well-being of Taiwan, they would have worked to invest in Taiwan over the past eight years.
At any rate I am pleased to see Hon-Hai investing in Taiwan. It will be good for the economy and help sustain the continued development of the tech industry here. Employing software engineers will also give the software industry in Taiwan a kick in the pants and help to establish them in this field. Although we should admit, ULead and Trend Micro aside, Taiwan's software development is much weaker than their hardware sector. This news will also come as a shot in the arm to Kaohsiung's port which recently lost a significant amount of business from Maersk (as noted in Hon Hai Plans to Set Up Shipping Center in Kaohsiung).
India Times Info Tech: Hon Hai to create 30,000 jobs
Reuters: Taiwan's Hon Hai to announce 3 major initiatives -report
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