China raids iPhone maker Foxconn as founder runs to be Taiwan president

Hannah Boland
Sun, 22 October 2023


Foxconn is headquartered in Taiwan but does most of its manufacturing in China - ANN WANG/REUTERS

Chinese officials have raided the offices of key Apple supplier Foxconn as the company’s founder prepares to run for the presidency of Taiwan.

Officials are investigating iPhone supplier Foxconn’s tax affairs and its use of land, Chinese state media reported on Sunday. Investigators have searched the company’s local offices as part of their inquiries.

The raids come as Foxconn’s founder and biggest shareholder, Terry Gou, prepares to mount a bid for the presidency of Taiwan. His candidacy has led to questions over whether Beijing could put pressure on Mr Gou through his business interests.


Foxconn is headquartered in Taiwan but does most of its manufacturing in China. The company, which had revenues of £168bn last year, is a key manufacturing partner for Apple and assembles the iPhone.

Two sources close to Foxconn said they believed the Chinese investigations may be political, Reuters reported. The disclosure about the inquiries comes less than three months before the Taiwanese election.

Premier Chen Chien-jen said Taiwan’s government had been in touch with Foxconn about the investigation and would help as necessary.

According to a report in the Chinese state-run Global Times, Foxconn’s offices in Guangdong and Jiangsu were searched by tax officials. Offices in the Henan and Hubei provinces have also faced inspections by China’s Ministry of Natural Resources, the report said.

The investigation comes against a backdrop of growing tensions between China and Taiwan, which Beijing argues is part of its territory. Chinese officials have threatened to invade the country and have stepped up a campaign of military pressure.

Taiwanese officials believe that China could be preparing to annex the country by 2027.

Mr Gou, who founded Foxconn in 1974, announced his intention to run for the president of Taiwan over summer. The 73-year-old billionaire, who is worth an estimated $6.6bn, stepped back from running the company in 2019 and left Foxconn’s board last month to focus on his campaign. However, he remains the company’s biggest shareholder with a stake of 12.5pc.

Mr Gou is seen as one of the most pro-Beijing candidates in the running for next year’s election. He has advocated for diplomacy with Beijing and has said the current ruling party in Taiwan, the Democratic Progressive party, is to blame for the growing threat of invasion. However, he said in August: “I will not bow to China’s threats.”

Scrutiny of Foxconn comes as Apple’s position in China also comes under pressure. Chinese government officials have reportedly discouraged the use of iPhones and sales of the company’s newest handsets have been weaker than expected.

Tim Cook, Apple’s chief executive, visited the country last week and met China’s vice premier Ding Xuexiang, and commerce minister Wang Wentao. He said Apple remained committed to growth in China.

Dan Ives, an analyst at Wedbush, said the investigations into Foxconn appeared to be a “shot across the bow from Beijing towards Foxconn and Apple in this ongoing geopolitical cage match.”

He said: “With a battle for AI and chips getting nastier, this is China pushing back and going after the golden goose Foxconn.”

Foxconn has been attempting to shield itself from geopolitical pressures by expanding manufacturing outside of China. Around three quarters of its factories are in China, according to estimates, but it has been opening facilities in Vietnam and India in a drive to diversify.

A spokesman for Foxconn said: “Legal compliance everywhere we operate around the world is a fundamental principle of Hon Hai Technology Group (Foxconn). We will actively cooperate with the relevant units on the related work and operations.”