Foxconn Is Quietly Working With Google on Robotics

Feb 11, 2014

Foxconn Is Quietly Working With Google on Robotics

LORRAINE LUK

Foxconn has long been associated as the partner for Apple, assembling the majority of the U.S. company’s iPhones and iPads.

But few people know the Taiwanesecontract manufacturer, also known as Hon Hai Precision industry, has been quietly working with Google.

People familiar with the matter told TheWall Street Journal that Foxconn has been working with former Android executive Andy Rubin since last year to carry out the U.S. company’s vision forrobotics

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To speed up robot deployment at its own factories, Foxconn Chairman Terry Gou met with Rubin in Taipei recently and they discussed new robotic technologies, they said.

At the meeting, Gou expressed excitement over new automation technologies demonstrated by Rubin, they said. Rubin also asked Gou to help integrate a technology company that Google is acquiring as Foxconn’s strength lies in mechanical engineering.

Google set up a new robotics group and acquired eight robotics companies last year, including Boston Dynamics, an engineering company that has designed mobile research robots for the Pentagon. The New York Times first reported Google’s robotics efforts and the acquisitions in December.

The report also said the targets of Google’s new robotics team are in manufacturing — such as electronics assembly, which is now largely manual — and competing with companies like Amazon in retailing.

The cooperation comes as Foxconn has been striving to accelerate automation efforts at its factories amid challenges of rising labor costs and workplace disputes in China, where it has more than a million workers. Foxconn’s chairman has reiterated his ambitions to build factories with robots in recent years as the company seeks to transform itself into a high-tech manufacturer focusing on high-margin, capital-intensive products such as automobile and medical equipment.

Analysts said the partnership makes sense as Foxconn, the world’s largest contract manufacturer of electronics devices, can provide Google the best testing ground for its new robotics technology. They said Google is expected to build a new robotic operating system for manufacturers, just like the Android operating system for mobile computing devices. A successful robotics operating system would further strengthen Google’s position in the technology industry.

“Foxconn needs Google’s help to step up automation at its factories as the company has the lowest sales per employee among the contract makers, given its large workforce,” said Wanli Wang, an analyst at CIMB Securities. “Using robots to replace human workers would be the next big thing in the technology industry. Not just Google, other major technology companies such as Microsoft and Amazon also have been developing robotics technology to capture the future growth opportunities.”

Online retailer Amazon.com has said it is developing pilotless flying vehicles that can deliver packages within a half hour of customers placing an order.

Separately, Foxconn has been actively seeking locations for research and technology investment in the U.S. In November, the company said it might invest $40 million in manufacturing and research facilities in Pennsylvania. The company also sent some engineers to Massachusetts Institute of Technology to learn the latest manufacturing and automation technology, the people said.

The Taiwan-based company has been seeking new avenues of growth as revenue from contract manufacturing slows. It has been making a push into software development and telecom services, and has also branched out into the retail market by selling its own-brand mobile accessories. On Monday, Foxconn reported its January revenue edged up just 0.3% from a year earlier to 314.55 billion New Taiwan dollars ($10.37 billion), further highlighting the need to diversify its revenue stream.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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