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Sharp CEO will not be Foxconn's next chairman, Terry Gou says

Tech tycoon further narrows successor candidates from 5 to 3

Foxconn Chairman Terry Gou, left, stands with Sharp CEO Tai Jeng-wu, whom he has praised as a cost cutter. (Photo by Jun Iiyama)

TAIPEI -- Foxconn Chairman Terry Gou on Saturday narrowed down the candidates to succeed him from five to three, excluding Sharp CEO Tai Jeng-wu and Foxconn Interconnect Technology Chairman Sidney Lu Sung-ching.

"I can tell you it will not be [Sidney] Lu Sung-ching. ... Some people guessed Huang Chiu-lien, but she's not even on the board," Gou told a group of reporters before he left a Cancer Alliance charity event. "Tai Jeng-wu is also not [the successor]."

Gou's comments came after the company, which trades formally as Hon Hai Precision Industry, on Friday night proposed a new slate of directors as it moves toward a leadership transition, with Tai poised to return to the Taiwanese company's board.

Gou, Foxconn's founder, who announced in April that he is running to become Taiwan's next president, remains on the proposed board for now, although he said he is ready to step down from top management.

One of the board candidates is expected to be chosen as Gou's successor to head the world's largest contract semiconductor maker, after the list is put to shareholders at a June 21 annual meeting.

The comments from Gou, who is the most influential person and largest individual shareholder in Foxconn, left three possible successors: Asia Pacific Telcom Chairman Lu Fang-ming, Foxsemiconn Chairman Young Liu and Foxconn Industrial Internet Vice Chairman Jay Lee.

Gou did not participate in the board meeting on Friday afternoon, as he campaigned in the central Taiwanese city of Taichung the entire day.

"I will still be on the board, but I will not be the chairman. This demonstrates my determination to run for president," Gou told reporters in Taichung on Friday night. The 69-year-old Gou said he will act in accordance with regulations when he needs to resign from the board.

Absent from the list of nominees was Huang Chiu-lien, the group's de facto chief financial officer and the aunt of Gou's first wife. As Gou's close aide since he founded the company in 1974, Huang had been seen as the most likely successor at the tech giant given her in-depth financial knowledge of Foxconn and its subsidiaries.

The tech tycoon who has run Foxconn for 45 years unexpectedly announced on April 17 that he would join the Beijing-friendly opposition Kuomintang's primary for the island's 2020 presidential election.

Gou's decision came as top Foxconn client Apple suffered a slowdown in sales of the iPhone, and the company logged two straight years of net profit declines amid a global contraction in smartphone sales.

Tai, whom Gou has praised as "Mr. Cost" for his ability to slash expenses, oversees the group's display and TV-related business, especially its 8K resolution technology, while Lu Fang-ming manages the technology for Foxconn's 4G and 5G wireless telecom equipment.

Tai left Foxconn's board when he took the top post at Sharp in 2016.

Sidney Lu, who is viewed as one of the masterminds behind Foxconn's multibillion-dollar investment in the U.S. state of Wisconsin, oversees the company's electronic components units, handling items such as automotive electronics, cables and connectors.

Liu manages Foxconn's semiconductor development. Lee, a distinguished professor at the University of Cincinnati, leads Foxconn's development of industrial artificial intelligence. Both the chip and AI businesses are in a nascent stage for Foxconn, but are viewed by Gou as the group's most significant future growth drivers.

"The fact that Gou remains on the board suggests that he is not entirely devoted to a succession plan," Chung Hsi-mei, a business administration professor at I-Shou University, told the Nikkei Asian Review. "It gives him a way out if he loses the KMT's primary election later."

The candidates hold positions of similar importance, Chung said, as each holds a leadership post in the company's strategic businesses.

"Every one of them has the chance [to be Gou's successor], but no one is certain," she said, adding that "Gou is still the most influential person for Foxconn's operations."

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