Hon Hai poised to nominate chip boss as group’s next chair

Reuters file photo

A motorcyclist rides past the logo of Foxconn, the trading name of Hon Hai Precision Industry, in Taipei on March 30, 2018.

ReutersTAIPEI (Reuters) — Hon Hai Precision Industry Co. is poised to nominate its chip unit head as group chairman to succeed Taiwan presidential hopeful Terry Gou, in what is internally seen as a surprise move, two people with direct knowledge of the matter said.

Liu Young, 63, is also a board member of Hon Hai’s Japanese electronics unit Sharp Corp.

The nomination would come after Gou, 68, told Reuters in April he planned to step down as chairman of the world’s largest contract manufacturer so younger talent could move up the ranks. Last week, Gou also said he would resign to demonstrate his determination to run in Taiwan’s presidential election.

The firm he founded is currently trying to cut its dependence on client Apple Inc. and smartphone assembly by expanding into areas such as artificial intelligence and the internet of things.

Liu’s possible appointment came as a surprise for many at Hon Hai due to his relatively junior rank among the Taiwan firm’s top executives, the people said on Monday.

Gou has repeatedly said internally that he wants someone “younger” to run the company, one of the people said. Liu joined Hon Hai in 2007 as special assistant to Gou and has since gained great trust, the person said.

Liu has led Hon Hai’s nascent semiconductor business, dubbed the S sub-group, since 2017, the person added.

Through Liu, Gou is likely to retain behind-the-scenes influence in strategic decisions, the person said. Such an appointment, however, is likely to have limited impact on day-to-day business because Hon Hai’s group companies have been operating independently for years, the person added.

Hon Hai did not respond to a request for comment. The two people declined to be identified as the matter was private.

A stock exchange filing last week showed proposed candidates for a new board included Gou and Liu, as well as other executives widely linked to the group chairmanship such as Tai Jeng-wu, chairman at Sharp, and Lu Sung-Ching, chairman at Foxconn Interconnect Technology Ltd.

The board proposal is subject to approval at an annual shareholders meeting in June before a chairman can be elected.

Hon Hai’s share price fell 3 percent on Monday versus the benchmark share price index’s 1.4 percent decline. The stock is up about 17 percent this year after falling 30 percent last year.Speech

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