Foxconn and TSMC in 2018 with Tim Culpan

Foxconn and TSMC in 2018 with Tim Culpan
Tim Culpan from Bloomberg discussed the Taiwanese technology giants, Foxconn and TSMC and why their fates are inevitably tied with Apple and where they are heading.

Tim Culpan from Bloomberg joined us in a conversation on the two technology giants from Taiwan: Foxconn and TSMC and how they have evolved for the past three years since 2015. First, Tim started the discussion with Foxconn and the major milestones in the past three years from the acquisition of Sharp to the recent listing of FIH Mobile and Foxconn’s efforts on automation and robotics in manufacturing. Next, Tim discussed the recent leadership transition in TSMC and where they are heading in the next few years.

Here are the interesting show notes and links to the discussion (with time-stamps included):

  • Tim Culpan (@tculpan, Linkedin, Bloomberg), Columnist at Bloomberg [0:25]
    • Since our last conversation, what have you been up to? [0:40]
  • Foxconn [1:11]
    • FoxConn (Bloomberg, Google Finance, Wikipedia) – Hon Hai Precision Industry Co. Ltd (HQ: Taipei, Taiwan), founded by Terry Gou and one of the best episodes in Analyse Asia history which you can listen to here.
    • Introduction to Foxconn [1:20]
    • How does the Foxconn group as a company evolve since our last conversation three years ago? [3:31]
    • It seems that most companies have difficulty in automating their manufacturing processes with robotics, in fact Tesla has the same problem, and Elon Musk conceded that humans are better at doing certain parts of car production, is this the same with Foxconn as well? [7:49]
    • Para-phrasing Mark Twain, are the rumors of robots taking over manufacturing greatly exaggerated? [10:25]
    • An interesting tweet you have shared recently on Apple’s recent 1 trillion market capitalisation milestone that Foxconn is valued at 1/20 ~ 5% of Apple’s market cap. Why has Foxconn’s stock not rise with Apple, given that it’s captive to the Apple > 50%? [10:48]
    • Tim’s comments on Foxconn’s failure to buy a major portion of the Toshiba chip unit deal made it difficult for them to add value to Apple. [12:53]
    • Here are some of the major milestones that the Foxconn group have achieved in the past three years, what are the implications for Foxconn Group? [14:36]
      • Acquisition of Sharp for screens technology [14:51]
        • Does Sharp has its own research and development arm to improve the current screen technology? [16:57]
      • Setting up manufacturing in US at Wisconsin, US. [18:00]
      • FIH Mobile (publicly listed in HKSE) sustaining losses of US$525M in 2017 [22:01]
    • How has the Foxconn leadership changed in the past three years? Any potential successors to Terry Gou? [23:07]
  • TSMC Group [25:29]
    • Taiwan Semiconductor Manufacturing Company (or TSMC Group) (Wikipedia, Bloomberg, Google Finance) – dual listed in Taiwan Stock Exchange & NYSE. Market Cap ~ US$109B in NYSE, more than 35K employees. Headquartered in Hsinchu, Taiwan, founded in 1987.
    • TSMC Group has undergone a major leadership transition in the past year with Morris Chang, and reached its 30 anniversary last year, what has been the impact to the company over all? [27:44]
    • TSMC recently suffered a virus attack recently, which are the real and false information perpetuated in the process? [31:23]
    • What are the key revenue drivers for TSMC Group? What are the innovations in semiconductor industry that TSMC is driving in the next few years and how will they impact the market? [34:06]
  • Closing [36:49]

Podcast Information:

The show is hosted by Bernard Leong (@bernardleong & weibo) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Altizen Desk (Twitter, Facebook, Medium). Sound credits for the intro music: Taro Iwashiro, “The Beginning” from Red Cliff Soundtrack.