Terry Gou Tai Ming Donates....!

We were stunned to see Terry Gou Tai Ming, founder and Chairman of Hon Hai Precision Technologies, will be donating 90% of his NT$173 billion (US$5.7 billion) fortune to charity after he gets married on Saturday! The Straits Times wrote:

Terry Gou, Taiwanese high-tech tycoon and one-time suitor of Carina Lau, has pledged to donate 90 per cent of his NT$173-billion (S$7.7-billion) fortune to charity after he marries a dancer tomorrow.

The 57-year-old widower made the promise at his engagement banquet on Wednesday sitting beside his bride-to-be, 33-year-old dancer Delia Tseng, said reports.

His Hon Hai Group's flagship company, Hon Hai Precision Industry, is the world's largest contract manufacturer in the electronics sector for brand-name companies such as Dell, Nokia and Sony.

Mr Gou said he had signed papers to pledge away his fortune before he decided to marry his fiancee, said reports quoting a lawmaker at the banquet.

But with Mr Gou's remarriage, she had to sign the documents too for his pledge to take effect.

He said he was moved when she signed the papers without hesitation.

Mr Gou made the decision to donate 90 per cent of his personal assets to charities in the future and his bride-to-be supports the decision without any hesitation,' lawmaker Wu Den-yih told TVBS news channel.

Mr Wu, who is also secretary-general of the ruling Kuomintang, was a guest at the banquet at the Grand Hyatt hotel. So were President Ma Ying-jeou and his wife.

Mr Gou's first wife died of breast cancer in 2005. They have two children.

Absolutely amazing! Mr. Gou is following in the footsteps of Bill Gates and Warrent Buffet and the precedent they are setting is an excellent example to all of us! Mr. Gou, however, has long been a philanthropist. In 2007 he donated NT15 billion dollars to the Taiwan University to develop a cancer hospital. Da Hsuan Feng, Senior Executive Vice President of the National Cheng Kung University wrote:

The news stated that Taiwan’s multibillionaire Terry Guo Taiming donated a whopping NT15 billion (around $455 million US,) lock-stock-and-barrel, to National Taiwan University to develop a cancer hospital and advanced medical facilities such as a proton therapy center and other biomedical engineering projects. To this point in time, this donation is the largest single gift made to a single university anywhere on earth. It even topped the $300 million gift of Joan and Sanford Weill's to Cornell University’s School of Medicine which was just announced as recent as June 13 of 2007. The claim then was that it was by far the largest single gift to a single university. This claim certainly did not withstand the test of time!

Da Hsuan Feng continued, saying:

Guo’s gift is sweeping the media almost on a daily basis in Taiwan and other regions of Asia, and is the intense discussions in coffee shops and restaurants all over East Asia. It is interesting that the intensity has not dropped off even though the event is by now well over a week ago. The “Terry Guo Effect,” as I would call it, seems to be here to stay.

Mr. Guo has indeed been a leader in both business and philanthropy. Perhaps other Tycoons will follow his example in the future. After all, who really needs billions of dollars?

Straits Times: Billionaire's act of love
Cimat: A Tale of Two “Typhoons”: The “Terry Guo Effect” (Opens PDF file)

Hon Hai Fights in Shenzhen

As if on cue!

A few days ago in China Strategy for Fabless Chip Designers I argued against Lung Chu, President of Asia field operations at Cadence, that Taiwan chip designers should partner with Chinese competitors. Also, yesterday in Mr. Ma please don't move the fabs to China I argued it would not be such a great idea for Taiwan to move stategic technologies to China. My main concern and the concern of many is the lack of protection against property rights.

In cases like this I hate to be right!

Today we read in the International Herald Tribune (IHT), Hon Hai Precision Technology (Hon Hai) is taking their Chinese competitor to court for stealing trade secrets. We also read the courts are delaying the proceedings enabling Hon Hai's competitor to become stronger. The IHT says (emphasis added):

Taiwan's giant electronics manufacturer Hon Hai Precision Industry Co. appears to have a big advantage in the China market — its principals all speak Chinese and have an intuitive sense for the country's often bewildering business culture.

But last week the company took out half-page ads in major Taiwanese newspapers to complain about delays in a mainland court over the prosecution of a Chinese competitor.

Spokesman Edmund Ding said Hon Hai suspects that BYD Company Limited, a Chinese electronics maker based in the southern city of Shenzhen, is systematically looting its trade secrets.

The purpose of BYD's alleged actions, Taiwanese media have reported, is to give the Chinese company a leg up against Hon Hai in winning big parts orders from international mobile phone powerhouse Nokia.

The row is a stark reminder that even for the most sophisticated Taiwanese companies — in this case one employing 500,000 Chinese workers — doing business in China is not as simple as it seems.

Later we read (emphasis added):

Cheng Jung-wen, a senior official at the Taiwan Merchant Association in Shenzhen said the Hon Hai case reflected a tendency among some Chinese officials to favor local companies over outsiders in intellectual property rights disputes.

Cheng said intellectual property theft is a common problem suffered by Taiwanese businesses, but that provincial Chinese officials seemed unwilling to
help them address it.

"We have long given up the thought of asking Chinese authorities for help," Cheng said. "The only way we can avoid damages is to develop new products all the time."

The context of this is clearly given in the IHT. Hon Hai, as the IHT points out, is a huge company. They are the world's largest contract manufacturer producing everything from mobile phones to computers. Their leader Terry Gou Tai Ming is a legend in Taiwan and one of the richest men on the planet. There are not many companies in Taiwan bigger than Hon Hai. If Hon Hai can get hammered by the theft of trade secrets, what can the smaller competitors do? What realistic chance do they have?

In China Strategy for Fabless Chip Designers I said:

So there is potentially a huge downside for Taiwan design firms establishing partnerships with Chinese competitors. They might steal their stuff and blow them out of the water! Don't get me wrong! Partnerships and joint ventures can and do work, but for them to work there must be trust and a record of behaviour that speaks for itself. Chinese firms must realize that business is not about getting ahead at all costs and at the cost of those you work with. Only then will people be more willing to partner with them.

I stand by those comments today! Do you?

International Herald Tribune: Taiwan electronics maker Hon Hai wages judicial battle against Chinese competitor

Gou Tai Ming (Terry Gou)

So I will be doing a thesis over the next year looking at some elements of the Taiwan Hi Tech industry. Saw a great 2007 article about Gou Tai Ming, the founder of Hon Hai Precision Technologies.

Hon Hai's revenue has grown more than 50% a year in the past decade to $40.6 billion last year. It is expected to add $14 billion in revenue this year. That is roughly the equivalent of Motorola's adding, within a year, the sales of CBS Corp.

Throughout his company's rise, the 56-year-old native of Taiwan has maintained a low profile. Publicity, he says, risks helping competitors and alienating customers. "I hate that I [have] become famous," Mr. Gou said in a recent three-hour interview at Hon Hai's Taiwan headquarters. It was Mr. Gou's first interview with Western media since 2002, following more than five years of requests by The Wall Street Journal. "We are so big we cannot hide anymore."

For anyone interested in the Taiwan Hi-Tech industry, the article is definitely worth the read. Link is below.

(Article: The Forbidden City of Terry Gou)