Foxconn to persist with build-operate-localize strategy in Vietnam

Hon Hai Precision Industry Co., Ltd., also known as Foxconn, has said it will continue to implement its build-operate-localize (BOL) strategy in Southeast Asia, including Vietnam, Thailand, and Indonesia.

The Taiwan-based giant, the world's largest contract electronics maker, affirmed continuation of the BOL strategy in its performance review for the second quarter of this year.

It said the move aimed to assist local partners in improving the supply chain and enhancing indigenous competitiveness. It will also actively share global resources with partners to expand the local market.

Foxconn said other countries where it will push the BOL strategy included Saudi Arabia and India.

It noted the deployment of the “3+3” transformation model (electric vehicle, digital health and Fii robotics + 5G solutions, semi-conductors and industrial AI) in Saudi Arabia to complement Vision 2030, the country’s transformative national development plan.

The Q2 review also said that Foxconn’s April-June revenue reached TWD1,304.5 billion ($40.94 billion), down 14% year-on-year; while its net profit fell 1% to TWD33 billion ($1.04 billion) and its operating income dropped 30% to TWD30.9 billion ($969.8 million).

The second quarter is traditionally an off-peak season, but the revenue figure was better than expected, Foxconn said. While performance in the third quarter should warm up, external factors such as global monetary tightening, geopolitical tensions, and inflation may dampen its full-year performance, it added.

Foxconn recorded a post-tax profit of $318.9 million from affiliated companies in Vietnam in 2022, according to the Taiwanese electronics giant's annual report for last year.

New Wing Interconnect Technology (Bac Giang) Co. Ltd, which was established in the northern province of Bac Giang in January 2015, accounted for the biggest portion with $107.34 million. Another Vietnam-based business, Fuyu, established in the same province in December 2019, followed closely with $100.72 million.

Last Friday, Foxconn announced that it has injected $100 million into its Singapore unit FIT Singapore to add to a new production project in Vietnam, according to the Taiwan Stock Exchange (TWSE).

Through FIT Singapore, or Foxconn Interconnect Technology Singapore Pte. Ltd., FIT Hon Teng, a subsidiary of Taiwan-based Foxconn, is going to put this new investment into Fu Wing Interconnect Technology (Nghe An) Co. Ltd. as part of the manufacturing giant’s global supply chain diversification, the company said.

In February, the tech giant signed a lease for a 50-hectare site at the Quang Chau Industrial Park in Bac Giang province for around $62.5 million to meet “operational needs and expand production capacity,” it said in another filing with the TWSE .

In late June, the northern province of Quang Ninh granted investment certificates to two Foxconn projects with a total registered capital of $246 million.

FECV Foxconn Quang Ninh, with an investment of $200.24 million, will manufacture and assemble electronic components, chargers, and charger controllers for electric vehicles.

Meanwhile, FMMV Foxconn Quang Ninh, with an investment of $46 million, will produce components for communications and IT products.