Foxconn spins out a slice of itself to fund cloud, IoT and 5G push
Seeks $4bn to build glorious workers palaces and diversify beyond boring old iPhones
Foxconn wants to spin out part of itself, perhaps including a facilities used to build either iPhones or chips for smartmobes, so it can diversify into cloudy and 5G products.
The manufacturer-to-the-stars has filed a prospectus with the Chinese securities regulator for a part-IPO of Foxconn Industrial Internet.
The company said it wants the IPO to raise up to US$4 billion it can use to invest in new projects.
As well as Apple, the prospectus lists Amazon, ARRIS, Cisco, Dell, HPE, Huawei, Lenovo, NetApp, Nokia and nVidia as customers.
The board of Hon Hai – the company that owns the Foxconn businesses – first voted for the spinoff in December 2017.
While terms of the offering haven't been finalised, Alibaba-funded Chinese media group Yicai Global reported the IPO will be for 15 per cent of the shares in Foxconn Industrial Internet. That report added that it's possible Foxconn's highest-profile business, iPhone manufacture, could be part of the float.
The proceeds of the IPO will be spent on eight projects; as well as continuing with industrial internet platforms, the company will set aside funds for data centres, cloud computing, 5G and internet of things solutions, artificial intelligence and intelligent manufacturing.
Foxconn leadership has previously signalled a desire to diversify into emerging markets. This IPO looks designed to make that happen.
If the IPO doesn't raise the whole $4.3bn, the company will seek loans for the rest. ®