If you have ever used a PC or any other digital device--and that includes just about everyone in the developed world--then you have probably encountered the handiwork of Terry T.M. Gou. Over the past few years, Taiwan has made itself the information technology outsourcing capital of the planet. And the king of outsourcing is Gou, chairman of Hon Hai Precision Industry Co. Gou's company makes PC components, servers, mobile phones, game consoles, and other IT gear for customers such as IBM, Apple, Sony, and Nokia. In 2001, Hon Hai became Taiwan's largest private-sector company in terms of sales, surpassing blue chips such as Taiwan Semiconductor Manufacturing Co. Sales rose 55%, to $4.5 billion, and profits soared 26%, to $382 million.
Don't expect Gou, 52, to be crowing, though. He builds his business quietly, avoiding the press as much as possible. He has to: His customers aren't necessarily eager for the world to know the real identity of the components manufacturer for their Dell PCs or Sony PlayStations. Gou even keeps his offices well-hidden. Unlike other Taiwanese tech powerhouses such as TSMC or Quanta Computer Corp., Hon Hai is not located in sleek headquarters in a science park. Its offices are in an industrial zone in a gritty Taipei suburb. The name of the town, Tucheng, which in Mandarin means Dirt City, says it all. To find Gou's cluttered office, visitors enter through a small door next to the loading dock, climb three flights of stairs, and walk down a dimly lit hall.
The unpretentious building symbolizes the CEO's no-nonsense approach. Gou boasts that he works 15-hour days, six days a week--and that he hasn't taken off more than three days for vacation since he started the company in 1974 as a maker of parts for black-and-white television sets. "You need real discipline," says Gou. "A leader shouldn't sleep more than his people; you should be the first one in, last one out."
That philosophy has worked for Gou, who instead of going to university attended a vocational school that trains students to be sailors. But the sailing life wasn't for him. He started Hon Hai with 10 workers and today oversees 50,000. To keep costs down, Hon Hai has aggressively expanded its production in China. While many Taiwanese companies have shifted manufacturing to the mainland, Hon Hai has been in the lead. Gou's first mainland investment was in 1988, and today he proudly declares that his company is the No. 2 exporter from China.
Investors have made Hon Hai one of Taiwan's most valuable companies, with a market capitalization of $8 billion. Analysts like Gou's slow-but-steady approach to growth, although they sometimes grumble about his company's lack of transparency. Hon Hai, for example, doesn't talk about its customers. Gou has won admirers among fellow members of Taiwan's IT elite. He often meets with Quanta Chairman Barry Lam to swap ideas. "I learn a lot from him," says Lam. "He knows very well how to expand the business and how to keep down costs."
Now, Gou is looking for new areas where he can put that expertise to work. He recently announced that Hon Hai would make a big commitment to expanding its research and development activities, including construction of a new research complex in Taiwan. And he wants Hon Hai to expand its "3-C" product range--computers, communications equipment, and consumer products--to include a fourth: cars. With the advent of smart automobiles equipped with computers, high-speed data connections, and satellite-navigation systems, autos "will become more and more electronic, with a lot of precision tooling," he says.
Even as he plots his next move, Gou is contemplating what, for him, was long unthinkable: time off. (He can afford to take a break: his 27% stake in Hon Hai is worth about $2.1 billion.) His two children are in their mid-20s, he points out: It won't be long until they have families. "Before they marry," he says, "I want to take a vacation with them." So Gou plans a week away from the office. After that, it's back to Dirt City, where he will quietly continue to make the digital world go 'round.
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