Foxconn to strengthen its presence in the EMEA market

Mumbai

August 30th, 2007

Foxconn is looking at India as the missing link, which will complete its
jigsaw when it comes to establishing its presence in the EMEA market. However
David Shih reiterates that initially the Indian market will be managed by
Foxconn's existing hub in Jebel Ali in Dubai.

How important is India as a marketplace for Foxconn and what are your
plans for the region?

India is very powerful and emerging market with about six million PCs sold
annually. The Middle East office of Foxconn has a good cultural and mental
understanding of the Indian market. This is why our Mid-East office oversees our
Indian business. Another reason for having the Mid-East office drive the growth
in the Indian region is because some major distributors based in Dubai have
Indian roots and know the local market conditions very well.

Our Mid-East office at the same time has already launched Foxconn as a brand
in 2005 in the MEA territory and today commands nearly 23 percent of the total
market share under just two years of operations. Our current experience of brand
building and communications with channel partners could be successfully
transferred and developed for the Indian market.

But won't the distance between the two countries make it difficult to do
business with the Indian channel?

Foxconn has got its hub in Jebel-Ali in Dubai and is ready to serve the
Indian partners with a very convenient schedule and the support of a strong team
from Dubai. We are confident that the distance will not affect our channel
business in India.

What are the advantages of serving the India market from Dubai?

The advantages of operations from Dubai are very simple, powerful and
beneficial for channel. If we try to distribute goods from China to India it
will lead us to delivery time of about 24 and 28 days in total before the
shipment reach customers. By current standards this is a very long go to market
time.

From Dubai the delivery time is significantly reduced to just five days to
reach Mumbai, which is the heart of the channel trading community in the
country. So we can provide quick turnaround time to our partners if we operate
from Dubai. This reduced shipment time will help distributors to speed the
process of supplying goods to their channel networks and increase the total
turnover of our operations in India.

Would it not have been easier to open an office in India in such a
scenario?

As I mentioned, currently we have a dedicated hub for Foxconn in Jebel Ali
that has been set up specifically to serve the Middle East and Africa region.
Here we store goods and make them available for all our customers based on a
deep analysis of the market situation and supply forecast.

Rather than open an office in India and have another team managing the
affairs there, we will simply add India as a territory to our Dubai operations.
This makes it easier for us to also work with top distributors in Dubai, who
already has many offices in India. Management is more streamlined in this
fashion.

How exactly will the Dubai office help the channel? Will it be just a
sales office for India or will it offer some other value additions to the
channel?

From day one our Dubai office's top priority is to not just look at sales
and moving boxes. Foxconn is a manufacturer of computer components since 1975
and we are aware that the success of our operations depends on building total
brand awareness for our customers. We have to factor for the entire channel
chain from the vendor to the distributor to resellers and finally end-users.

At India we have seen that different international brands and local brands
play a massive role. As a global manufacturer, Foxconn also supports some
existing local brands as well as systems integrator partner. This year we want
to extend the entire bouquet of offerings to our channel, including lowered

delivery time, smooth communication, a better understanding of market needs,
easier RMA and international warranty polices. We want to give partners more
options for doing businesses in India just like it is done globally.

What is the business growth you are expecting in India?

In India, in our first year of operation, we expect to grow by 10 to 12
percent. We are confident of achieving this without worrying about competition
from other vendors who are already busy with current orders. And still with such
a market share Foxconn will aggressively keep moving to Top 2 or Top 3 vendors
list in the IT components space.

What will your distribution network be in the country?

We have not yet announced any distributors for India. The Indian market
requires a different approach since the territory is quite big. So two or three
distributors might not work successfully to cover market.

We currently are considering the top five distributors to build up a strong
and dedicated channel network in India and Dubai. We don't want to work with
'one-day sales guys' as such strategies fail on long term scale.

Foxconn will work hard to listen to market needs and provide products that
are needed by niche markets. If any of our distributors have the proper product
portfolio, which will fit the current market conditions, they will be happy to
cooperate and move Foxconn brand on their board. With time we will set up an
indigenous channel and work out our strong points at each region of India to
adjust strategy wisely.

What are you doing to ensure that your focus on India does not distract
you from your efforts in the Middle East market?

First of all we have studied the Indian IT market deeply and will select
those respective territories where our partner-distributors can focus well. We
also adjusted our forecast system to ensure proper supply of our products like
motherboards, coolers, VGA cards and chassis to match the market needs.

The distribution channel structure in Middle East and Africa is already well
settled and we expect to meet all our partners during the Gitex exhibition this
year. This event helps us to learn more from distributors about their markets of
operations and make proper adjustment for the long-term strategy of Foxconn
participation.

Our entire Foxconn team of Middle East, Africa and India will communicate and
listen to the suggestions given by the channel. We also adjusted our internal
structure and have invited additional people to offer service of the highest
standard to all our customers.

We also expect support from our headquarter office in Taiwan or China based
on our previous experience of operations in India with PC system integrators
projects. Recently Foxconn started manufacturing VGA cards and our products have
won many awards from respected magazines and testing labs.