Foxconn International to Name Chih CEO After Cheng Quits
Foxconn International Holdings Ltd. (2038), a contract maker of phones for Nokia Oyj (NOK1V) and Research in Motion Ltd., is set to name company veteran Calvin Chih its new chief executive officer after Terry Cheng resigned.
Chih, who joined Lang Fang, China-based FIH in 2005 when it acquired the mobile-phone design company he founded, will be interim CEO ahead of formal approval by the company’s board, Hon Hai Precision Industry Co. spokesman Simon Hsing said by phone today. Hon Hai, based in Taipei, is the parent of FIH with a stake of about 70 percent.
Chih takes charge of a company struggling with the decline of three of its largest clients -- Nokia, RIM and Motorola Mobility Holdings Inc., while the rest of the Foxconn Technology Group benefits from surging demand for Apple Inc. iPhones and iPads. Chih founded Chi Mei Communication Systems Inc. in 2001 and headed the team that designed FIH’s first handsets for Motorola.
FIH fell 1.9 percent to HK$2.66 as of 11:01 a.m. in Hong Kong trading, extending its drop this year to 47 percent. The stock has declined more than 90 percent from its November 2006 high. Annual revenue fell for a fourth consecutive year in 2011 to $6.35 billion from a peak of $10.7 billion in 2007, according to data compiled by Bloomberg.
FIH’s net income of $90.5 million for the six months to Dec. 31 ended three consecutive semi-annual losses as customers boosted outsourcing. On April 27 the company said its first-half loss would widen from the $17.7 million it posted a year earlier.
Nokia, Motorola, RIM
Nokia, Motorola and Research in Motion have posted at least four consecutive quarters of losses or declining profits as they struggle to increase revenue amid the surging popularity of smartphones from Apple, Samsung Electronics Co. and HTC Corp. (2498)
FIH’s three largest customers accounted for 70 percent of sales last year, according to Bloomberg calculations based on data from its 2011 annual report, which didn’t name the clients.
Chih, listed in FIH’s annual report published in April as 53 years old, has 32 years experience in the communication industry including positions at GTE Corp. and Rockwell Semiconductor Systems, according to the annual report.
Cheng, 59, is quitting less than a third of the way into a three-year term as CEO that began Jan. 1. He has been at the company since 2007 after 10 years as Texas Instruments Inc. (TXN)’s president for Asia.
FIH gave Cheng a three-year contract with an annual salary of NT$3.5 million ($117,000) plus bonus when he replaced Samuel Chin, who relinquished the executive role while remaining chairman, the company said Nov. 30.
Cheng will retire from Foxconn Technology Group on July 31, Hon Hai, the Taipei-based flagship of the group, said in a statement late yesterday.
FIH’s annual report lists the company’s head office as being in Lang Fang, in China’s Hebei province, with its principal place of business in Hong Kong.
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