Terry Gou, April 7. (Photo/Hung Hsi-lung)
Giant electronics manufacturing contractor Foxconn announced on April 23 a partnership with 21Vianet Group, China's leading telecom data company, marking the progress of Foxconn's parent group Hon Hai in its transformation into a machine-to-machine manufacturer and a big-data firm, scheduled for completion by 2020, according to Terry Gou, chairperson of the Taiwan-headquartered group, which is the world's largest electronics manufacturing services provider.
As a first step, the two companies will jointly launch a new-generation data center, which will deal initially focus on business from Tianjin, Shenzhen and Guiyang in China and Kaohsiung on the Taiwan side. The joint venture follows the inking of a contract in March between Foxconn and the administrative committee of the Gui'an New Zone in Guizhou province, calling for the setup of a green-tunnel data center and an R&D center at a cost of 220 million yuan (US$35 million) in the zone.
Hon Hai has decided to make the plunge into big data and cloud computing services to balance the thinning margins of its contract manufacturing business, as the company only racked up sales of NT$3.95 trillion (US$130.3 billion) in 2013, growth of 1.3%, a far way off its 15% target.
According to the Chinese-language Beijing Times, the new-generation data center is part of Hon Hai's efforts to diversify its operations in a bid to double its revenue to NT$10 trillion (US$330 billion) over the next 10 years.
"We now only need 15 minutes to complete the design for a mold by having customers, suppliers, and design and manufacturing units discuss the blueprint via cloud-end connections simultaneously, a far cry from around one week in the past," said Guo, adding that the company will set up a platform jointly with 21Vianet which will be open to other manufacturers, logistics firms and service firms for the provision of data services.
Gou predicts extensive cloud-end applications in the future, in sectors including industry, education, safety, health, property trading, environmental protection, and transportation, saying, "Big data can facilitate the management of hundreds of thousands of machines online, making machine-to-machine connections via cloud-end networks real."
Guo said that although cloud-end networks and the extensive use of robots will greatly automate the group's production, there will be no massive lay offs; however, the company will focus on upgrading the quality of its workforce rather than expanding its size by emphasizing education and training its employees.
Terry Gou 郭台銘