This week is big for Hon Hai Precision Industry Co. (TPE: 2317). The computer and consumer electronics manufacturer who trades under the controversial Foxconn Technology Co., Ltd. (TPE: 2354) as a lead manufacturer for Apple (NASDAQ: AAPL), kicked off a massive recruitment campaign on Monday.
The company aims for 15,000 new hires, beginning in Taiwan, to grow beyond its core business of contract manufacturing. Hon Hai, who is probably best known for making iPhones and iPads, is already the world’s largest contract manufacturer of electronics.
Over the next six months, Hon Hai hopes to attract talented recruits in engineering, telecommunications, e-commerce, biotechnology, automation, and in software and hardware development.
The Taiwanese company has been in business for roughly forty years, and has steadily proven itself as a manufacturer, but amid continuous transformation in the tech industry, this latest move signifies its readiness to move into different markets; to go beyond manufacturing, and reach into product and software design.
Currently, the manufacturer has 46,000 employees in Taiwan and more than one million in China, where its main fabrication facilities are based.
What it Means
The manufacturer has stated that this hiring rampage is part of the company’s efforts to expand investments in Taiwan, and to help build the country as a technology-based economy.
But we all know what’s really going on here: Hon Hai wants a bigger slice of the pie.
In order to preserve growth momentum, it has already started pushing into software development and telecommunication services, and even the retail market with its own brand of mobile accessories.
All the while, it has been steadily diversifying to become an all-around, all-purpose partner to its clients.
The hiring plan coincidentally comes just as Hon Hai is gearing up to launch its new 4G mobile service in Taiwan, after it secured licensing in late 2013.
There is also speculation that business in Taiwan is nothing more than a front; a testing ground for Hon Hai’s telecom equipment business that would compete with major vendors like Swiss-based Ericsson (NASDAQ: ERIC) and China’s Huawei (SHE: 002502).
And we can’t forget Hon Hai’s newly-developed “eight screens, one network and one cloud” sector, according to
The China Post. Eight screens refer to smartphones, tablets, notebooks, LED screens, all-in-one desktops, portable televisions, smart TVs, and electronic whiteboards.
The first stop for this so-called “recruitment” will be the National Taiwan University, where it will seek up and coming engineering talent, who will likely be sent to factories in northern and central Taiwan. Starting salaries will be around NT$36,000 (US$1,188), according to The China Post, and more than NT$45,000 for those who hold a master’s degree.
From there, the company is opening its doors internationally, to recruit talent from all around the world. The process may be taking place in Taiwan, but the company is seeking diversity of nationalities and cultures to incorporate into its global platform. It helps that the manufacturer already has operations in the U.S., Indonesia, Japan and China.
Hon Hai said it will be offering a barrage of incentives that include healthcare services and festival gifts to its employees. It will offer performance bonuses, stock options, and scholarships to those who seek higher education. And after a length of time, employees will have the opportunity to work abroad in any number of its locations.
What it Means for You
From where I’m standing, no matter what Hon Hai wants to call it – recruiting, or whatever – it’s rapidly advancing its core segments of business.
Even though this company makes a huge number of consumer electronic devices for different companies, about 40 percent of its revenue comes from Apple. The problem is that Foxconn’s growth is not pegged to Apple’s success. Whether or not iPhones sell is immaterial to the company’s profit. For growth to take place, it has started moving toward software and services.
This means the relationship between hardware and software empires could be shaken, and that includes Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT), just to top it off…because Foxconn has recently shown a predisposition for Mozilla’s burgeoning open source Firefox OS. If the company opts to utilize Mozilla’s operating system instead of the ones offered by Google and Microsoft, it could create major ripples through the software industry.
