Foxconn may acquire Belkin for US$866 million to focus on IoT and bid farewell to OEM

Latest update time：2021-09-01 04:58

Reads：

Foxconn has always been known as Apple 's "OEM factory ", and most of its business is not directly centered around consumers. Recently, Foxconn 's subsidiary, Hon Teng Precision Technology Co., Ltd. ( Foxconn Interconnect Technology, FIT for short), announced that it would acquire Belkin, an American IoT hardware company, for $ 866 million in cash . Taking this opportunity, FIT will open a smart home business .

Not long ago, Terry Gou, chairman of Foxconn 's parent company Hon Hai Precision , announced Foxconn 's plan for the next few years : to increase its efforts in the development of AI and big data , and to strive to transform into a more influential force in the global technology industry .

It is reported that half of Foxconn 's sales come from Apple . If Apple changes its partners or the iPhone loses popularity , Foxconn will also be in trouble.

As the global smartphone industry slows down, Hon Hai is restructuring its pure foundry business . Last month, Foxconn Industrial Internet Co. , Ltd., another subsidiary of Foxconn , wrote in its IPO prospectus that the next-generation businesses they will focus on include cloud computing , IoT solutions , AI manufacturing, 5G , etc.

As early as 2016, Foxconn made headlines for its acquisition of Japanese consumer electronics manufacturer Sharp . But this acquisition of Belkin not only means that Foxconn has further bid farewell to the title of "OEM factory ", but also clearly shows its transformation path.

Belkin is a global computer hardware manufacturer of connectivity devices . Belkin 's main products include WiFi routers and domain extenders, home automation solutions , mobile device charging , cases , covers and docking solutions , tablet computer keyboards , power and data cables and KVM switches. Sales are mainly to retailers , wholesalers, dealers and distributors , and online purchases are also supported . The company's net income for the year ended September 2017 was US$ 4.663 million , and the audited net asset value at the end of the year was US$ 57.422 million .

Currently, Belkin has two major brands , Linksys and Wemo. Linksys is a network hardware manufacturer known for producing home routers and was acquired by Belkin in 2013. Wemo, an independent brand developed by Belkin , has helped Belkin enter the Internet of Things market through a series of smart home products such as plugs, switches, and light bulbs .

Belkin's main business just meets Foxconn 's requirements for transformation into an AI and IoT manufacturing enterprise and development of retail business , so it is natural that it received an acquisition price far higher than its valuation .

"We are very excited to acquire Belkin and its accumulated resources in the high-end consumer products field ," said Sidney Lu, CEO of FIT. "We look forward to integrating Belkin's features and solutions into FIT, enriching our high-end consumer product portfolio and accelerating our pace of penetration into the smart home ."

"We value the synergies with FIT, including leveraging their world- class manufacturing capabilities to improve Belkin's operational efficiency and competitiveness . In this acquisition , we will be able to gain more resources to invest in our employees and explore market opportunities ," said Chet Pipkin, Belkin CEO and founder . "I am excited to take the Belkin, Linksys, and Wemo products and brands to new heights."

According to foreign media reports, the acquisition must be approved by the U.S. Treasury Department's Foreign Investment Committee , and the U.S. government believes that the sale of Belkin's router business may raise national network security issues , but Foxconn promised last year to build a $ 10 billion LCD factory in Wisconsin , which may facilitate the smooth progress of the acquisition . The final acquisition result is not yet known.