Apple supplier faces scrutiny in China, shares drop by up to 3% amid election season tension.
Shares of Foxconn, the Taiwanese company that manufactures most of Apple’s iPhones, fell by as much as 3% on Monday after a report suggested that the company was under investigation by Chinese authorities for tax audits and land use issues. The report, published by China’s state-backed Global Times, mentioned that some of Foxconn’s key subsidiaries in China were being audited for taxes, while China’s natural resources department had carried out on-site inspections of land usage at Foxconn’s operations in Henan and Hubei provinces, among other areas.
The Global Times did not provide specific details about the probes, and no Chinese government agency has officially confirmed the investigations. Foxconn responded in a statement on Sunday, emphasizing that compliance with legal standards is a core principle of its business worldwide and that it would cooperate fully with the relevant authorities. Foxconn, known officially as Hon Hai Precision Industry Co. Ltd., did not offer further comments on the matter.
Foxconn’s major iPhone production facility in Zhengzhou, Henan, employs about 200,000 workers, though the company also operates smaller manufacturing plants in India and southern China. The report on the investigation comes just months before Taiwan’s presidential and parliamentary elections.
Political Context and Election Concerns
Foxconn’s founder, billionaire Terry Gou, who stepped down as CEO in 2019 and no longer plays a direct role in the company’s operations, is running as an independent candidate in the upcoming Taiwanese elections. Gou, who has close business and personal ties with both China and the United States, has criticized Taiwan’s current ruling Democratic Progressive Party (DPP), claiming that its policies have escalated tensions with China. He contends that only he can maintain peace, citing his business experience and connections.
Gou’s spokesperson, Huang Shih-hsiu, directed questions about the Foxconn investigation to the company, noting that Gou had relinquished control of the company years ago and is no longer involved in its day-to-day activities.
Taiwan’s Vice President and DPP presidential candidate Lai Ching-te, who leads in the polls, responded to the report, calling it “unexpected” and “regretful.” Speaking at a campaign rally, Lai urged the Taiwanese public to support Foxconn and other local businesses amid the ongoing investigation.
