"Betrayer Samsung's Collapse Is the Goal"... The World's Largest Manufacturing Outsourcing Caught in Anti-Korean Sentiment [News Inside]

Guo Timing Foxconn Founder

▲Guo Taiming Foxconn Founder

[Asia Economy Reporter Kwon Jaehee] "My life's goal is to bring down the betrayer Samsung Electronics."

This is a statement from Terry Gou, the founder of Foxconn, the world's largest contract manufacturer that produces Apple's iPhone.

In addition, Terry Gou has made remarks such as "Buy iPhones, not Galaxy," "Unlike Koreans, Japanese do not stab you in the back," and "I will defeat Samsung Electronics within five years by partnering with Japanese companies."

Foxconn, which produces about 40% of the world's consumer electronics including Apple's iPhone and Amazon Kindle, has somehow ended up in a hostile relationship with Korean companies.

In fact, he was once betrayed by Samsung Electronics. In 2010, Samsung Electronics filed a complaint with the European Union (EU) against six companies including Foxconn's LCD production affiliate Chimei and LG Display for price-fixing allegations. As a result, Foxconn had to pay a fine of 300 million euros. However, Samsung Electronics was exempted from the fine in full due to voluntary reporting.

After this incident, Terry Gou continued to make blunt remarks about Samsung Electronics in public.

Terry Gou was born in 1950 in Taipei, Taiwan. His father, from Shanxi Province, China, and his mother, from Shandong Province, fled the Communist Party and migrated to Taiwan in 1949.

From a young age, Terry Gou developed a business sense by producing tires in a rubber factory. In 1974, at the age of 24, he started a business with 400,000 Taiwanese dollars, including 100,000 Taiwanese dollars given by his mother. The first business he chose was plastic manufacturing.

Thus, Terry Gou stepped into the world of business in earnest and encountered three opportunities that allowed him to grow into the world's largest contract manufacturer today.

[Image source=Reuters Yonhap News]

The first opportunity came in 1980 with an order from Atari, an American game console manufacturer. Atari decided to produce overseas through contract manufacturing to ensure stable supply during the boom of video games in the 1980s, and Terry Gou seized this opportunity.

This led Terry Gou to resolve to grow beyond Taiwan into a global company. Subsequently, he went to the United States empty-handed and ran around trying to find new clients, but he was often suspected of being an industrial spy or turned away at the door. Nevertheless, he did not give up.

He then caught his second opportunity by entering mainland China in 1988. At that time, China was beginning to accept capitalism, and unlike other Taiwanese companies that hesitated to invest in mainland China, Terry Gou took a gamble. His prediction was correct. In 1988, he built the largest production plant in Shenzhen, Guangdong Province, China, and with full support from the Chinese government, he was able to grow.

Foxconn, which had been on a growth trajectory, finally hit the jackpot when it met Apple. Apple originally entrusted production to LG Electronics, but even the meticulous Steve Jobs recognized Foxconn and began entrusting his company's products to Foxconn. This was because before partnering with Apple, Foxconn had already gained recognition in production and quality systems as American electronics companies like Dell Computer began outsourcing production to Foxconn one by one. Meeting Apple, Foxconn rose to become the world's largest contract manufacturer producing about 40% of global electronic products.

The reason Foxconn makes negative remarks about Korean companies is widely believed not to be merely emotional comments stemming from past bad experiences. For Foxconn, whose goal is to move beyond contract manufacturing and become a comprehensive electronics company with its own brand, Samsung Electronics is a strong competitor. Foxconn's acquisition of Japan's Sharp is in this context. Moreover, Foxconn has openly shown its ambition to enter the semiconductor industry dominated by Korea by making an investment of about 30 trillion won to acquire Toshiba's semiconductor business, Toshiba Memory. Although this deal eventually fell through, Foxconn's relentless progress is still ongoing.