Foxconn founder Gou maintains low profile even as he transforms the tech world

In an age that worships smartphones, self-made billionaire Terry Gou has grown Foxconn Technology Group into a company that builds more of them than anyone else — and cheaply enough in many cases for teenagers to afford.

Gou founded the Taiwan-based company in 1974 as a $7,500 garage startup. Once scrutinized for its Chinese sweatshops and worker suicides, Foxconn is known to operate with military efficiency and almost single-handedly sets the international standard for lowest possible production costs.

Yet for all his wealth and his company's world-changing products, both Gou and Foxconn are all but anonymous outside of China, where they mass-produce electronics on behalf of well-known outsourcing brands including Apple, Dell and Hewlett-Packard.

Making Gou, 66, all the more invisible is the secrecy of the company's manufacturing operations and his own penchant to avoid publicity. The entrepreneur's career trajectory is virtually indistinguishable from that of the $136 billion manufacturer he created, grew and guides.

“Foxconn is a name that most American consumers don’t know because their brand isn’t on anything, but their components are in everything,” said John Frisbie, president of the U.S.-China Business Council, an association of U.S. companies active in China.

“And similarly, Terry Gou is probably a name that many people don’t know,” Frisbie said.

Those who do know Gou call him a man of nearly inexhaustible energy and nonstop corporate reinvention. So Wisconsin, where Gou's company has announced plans to build a massive $10 billion flat-panel display factory, can soon expect to feel the ripples of economic change that come with Gou wherever he sets up shop.

While he may have grown his company with cheap labor and Chinese subsidies, Gou more recently has become a convert to robotics, automation and the integration of artificial intelligence into the manufacturing process — all in the name of driving down costs.

“He rarely stays in the same place for more than three days, traveling constantly and conducting hours-long meetings,” according to a recent profile of Gou in Japan’s Nikkei Asian Review. “Yet he never shows any sign of fatigue.”

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Gou, who has an estimated net worth of $5.6 billion, comes from humble roots.

He was born in 1950 in Taiwan to parents who had just fled the civil war and its atrocities that had torn up their homeland in mainland China, leaving it stuck in famine and political oppression.

His father was a police officer who made sure his first-born son got a basic education. Gou's early career began in a Taiwanese rubber-making factory.

But in 1974, at age 24, Gou rented a shed near Taipai and hired a handful of workers to manufacture simple plastic rotary switches for television sets. 

He called the startup Hon Hai Precision Industry Ltd., which remains the name of the official parent company of Foxconn. In the early days, the outlook was bleak, not least because the oil crises and recession of the mid-'70s nearly destroyed his early venture.

“At the lowest point, Gou's wife could barely afford rice to feed their children,” Nikkei reported separately.

Hon Hai got its big break in 1980 with an order from Atari, the pioneer in video games, to make the console's joystick.

Gou rode the contract for all it was worth, embarking on a 32-state tour of the United States to sell his capabilities, staying in cut-rate hotels along the way. At times he forced his way into U.S. corporations and got kicked out by security, according to a 2010 profile in Bloomberg Businessweek.

Then in 1988, Gou returned to mainland China in time for the early days of the Chinese economic ascendancy. He opened a production facility in the southern Chinese city of Shenzhen, where his largest factory remains to this day. 

Beijing obliged with massive state subsidies, making it easy for Foxconn to use China as an export platform to the rest of the world. Foxconn adopted the basic Chinese model: creating large manufacturing campuses, offering onsite dormitories and meals for migrant workers drawn in from China’s rural interior provinces.

Today, Gou is known in the highest echelons of China’s single-party leadership and presides over 12 major manufacturing centers in China, some of which employ several hundred thousand workers.

In 2010, a spate of suicides at Foxconn's Chinese facilities drew international scrutiny. Since then, the company has raised wages and offered counseling to employees.

But with those wage hikes, a new Foxconn began to emerge: Gou began to embrace the idea of robots, hyper-automation and artificial intelligence. It's that business model that Foxconn is likely to bring to Wisconsin.

Also, as Gou has seen that contract manufacturing of products such as Apple's iPhone brings only a sliver of profit from each device to Foxconn, he has begun diversifying: Last year, Foxconn acquired Sharp Corp. in Japan, giving the company a brand of its own.

In recent interviews, Gou said he also wants to get into cloud computing, software development and internet data centers. He also has an outstanding bid to acquire the memory-chip division of Japanese tech conglomerate Toshiba. 

So, no longer content merely assembling products for others, Foxconn could be a very different entity by the time its Wisconsin facility opens its doors in an estimated three years.

According to the Nikkei Asian Review, “Gou's motto is, ‘Effort, effort and more effort.’”