Hon Hai sets up task force to review possible impact from trade war
Taipei, May 27 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co., said Sunday it has set up a task force to review possible impacts from the U.S.-China trade war.
In a posting filed with the Taiwan Stock Exchange that day, Hon Hai, the world's largest contract electronics maker, said the task force is in close contact with company units worldwide to watch for the latest market development.
Sources from Hon Hai told CNA that the task force is comprised of some of the newly nominated members of the board and will focus on changes in the global market.
Earlier this month, a board meeting nominated nine new members: Terry Gou (郭台銘), Lu Fang-ming (呂芳銘), Liu Yang-wei (劉揚偉), Lee Chieh (李傑), Lu Sung-ching (盧松青), Tai Jeng-wu (戴正吳) as well as three independent directors who are Wang Kuo-cheng (王國城), Kuo Ta-wei (郭大維), and Kung Kuo-chuan (龔國權).
Gou, the founder and chairman of Hon Hai, said he will not seek the chairmanship after he announced his intention to take part in the opposition Kuomintang's presidential primary.
Hon Hai has scheduled an annual general meeting for June 21 for shareholders to confirm the nominations.
The sources said even before a vote on the nominations, the nominees have moved quickly to help shield the company from possible impacts resulting from the trade war.
In the statement, Hon Hai said the on-going trade friction between Washington and Beijing has had limited impact on its business, though it did acknowledge that the disputes are likely to cause some changes in client orders.
Hon Hai, an iPhone assembler and also known as Foxconn on the global market, emphasized that orders from some clients have fallen but increased from others, indicating that global trade tensions have had only a limited impact on the company's business.
Hon Hai said it has built a broad worldwide production base that enables it to adjust production allocations under current fast changing market conditions to better meet customer demand.
The U.S. has raised punitive tariffs on US$200 billion worth of Chinese merchandise from 10 percent to 25 percent and is planning to impose up to US$25 percent tariffs on an additional US$300 billion worth of Chinese goods, pending a congressional hearing scheduled for June.
In addition, U.S. President Donald Trump issued an executive order on May 15 and declared a national economic emergency that empowers the government to ban the technology and services of "foreign adversaries," a move that is seen as targeting Chinese telecom equipment maker Huawei Technologies Co.
Since then, Google Inc. has said it is planning to restrict Huawei's access to its Android operating system and to limit access to its apps such as Gmail and the Google Play store in new handsets made by Huawei, which is likely to seriously affect shipments of the Chinese smartphone brand, the second largest in the world.
In addition to Google, other tech giants such as ARM Holdings, Intel, Qualcomm, Broadcom and Micron Technology have also announced that they will suspend business or terminate cooperation with Huawei.
Huawei is one of the major clients of Hon Hai's industrial Internet subsidiary China-based subsidiary Foxconn Industrial Internet Co. Ltd. (FII).
FII provides Huawei with products, such as converters and servers used in data center operations, and market analysts said the Chinese client accounts for 20-30 percent of the Hon Hai subsidiary's total sales.
(By Chung Jung-feng and Frances Huang)
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