Fuji Foxconn's chip design subsidiary, Zhuhai Lingyange, participated in the 2021 World Semiconductor Conference, with the Fuji Foxconn logo on the right (source: TMTPost App editor's photo)

BEIJING, October 23 (TMTPost) --  The tax authorities in Chinese mainland have conducted tax audits of key subsidiaries of Foxconn Group in Guangdong, Jiangsu, and other provinces, and the natural resources authorities have conducted on-site examinations of the land use of Foxconn's factories in Henan, Hubei, and other provinces, according to Global Times.

The news report quoted Zhang Wensheng, deputy dean of the Taiwan Research Institute of Xiamen University, as saying that the audits and examinations were a normal administrative action in accordance with the law.  Foxconn's subsidiaries have an obligation to actively cooperate with inspections and investigations. If there are illegal and irregular activities, they should admit their mistakes, accept punishment and quickly correct them. 

In response to this news on the afternoon of October 22, a spokesperson for Hon Hai Precision Industry Co., Ltd. (TPE:2317), the parent company of Apple's iPhone supplier Foxconn, issued a statement in response to the Taiwan Stock Exchange, stating: "Compliance with laws and regulations is the basic principle of the group worldwide. We will actively cooperate with the relevant units in their operations."

It is reported that Foxconn is a subsidiary of Hon Hai Precision Industry Co., Ltd., the world's largest consumer electronics contract manufacturer and the most important assembly contract manufacturer in Apple's iPhone supply chain. In addition, tech giants such as NVIDIA and Qualcomm are also customers of Foxconn.

According to Foxconn's official website, since 1988, Hon Hai Precision Industry Co., Ltd. has invested in Shenzhen, Zhengzhou, and other places. Currently, it has more than 40 parks in mainland China, with a total of over 720,000 employees. Its product range covers consumer electronics, cloud network products, computer terminal products, components, and other four major areas.

In 2022, Foxconn Group's revenue was approximately RMB 1.49 trillion, an increase of approximately 10% compared to the previous year; the group's total imports were approximately RMB 540 billion, accounting for 3% of China's total imports; the total exports were approximately RMB 849 billion, accounting for 3.5% of China's total exports.

In recent years, Hon Hai Technology Group has started to transform and upgrade, actively investing in three emerging industries: electric vehicles, digital health, and robotics, as well as three new technological fields: artificial intelligence, semiconductors, and next-generation mobile communications. It has also built new factories in India, Vietnam, Mexico, and other regions, hoping to move away from its identity as a "manufacturing and assembly outsourcing" company and upgrade to become the world's largest electronic technology manufacturing company with cutting-edge technology layout.

In September of this year, Terry Gou, one of China's billionaires, founder of Foxconn, and founder of Hon Hai, announced his resignation from the board of directors of Hon Hai Technology Group.

Earlier on October 22nd, the Global Times reported exclusively that relevant departments had conducted tax inspections and land use investigations on companies under Foxconn, but did not disclose more details about the investigations and tax inspections. At the same time, the documents issued by Hon Hai Technology Group did not provide more specific details, only stating that they would actively cooperate with the work.

TMTPost App sought more detailed information from Hon Hai, but as of the time of publication, Hon Hai Technology Group has not responded.

Foxconn's A-share listed company, Industrial Fulian (601138.SH), has also not released any relevant event announcements. However, multiple related terms about Foxconn have surged on Weibo's hot search in the morning.

Zhang Wensheng emphasized that Taiwanese companies, including Foxconn, should not only share the dividends of development and achieve substantial growth in the mainland, but also assume corresponding social responsibilities and play an active role in promoting peaceful development of cross-strait relations.

(This article was first published on TMTPost App, author | Lin Zhijia)