How to Buy Foxconn Stock in the U.S.

Jump straight to it: You have the option to purchase Foxconn stock in the U.S. by using international brokers like Interactive Brokers.

Foxconn Technology Group is a division of Hon Hai Precision Industry Co. Ltd. (OTCMKT: HNHPD). You can start buying foreign stocks like Hon Hai in a variety of ways if you’re based in the U.S., including with a regular U.S. brokerage account. Here’s how to invest in Foxconn.

How to Buy Foxconn Stock

Investing in stocks can help you grow your wealth. One company that many investors find interesting is Foxconn, also known as Hon Hai Precision Industry Co., Ltd. Foxconn is a large electronics manufacturer. It produces devices for major tech companies and is a key player in the market.If you want to add Foxconn stock to your portfolio, it’s important to do your research. This guide will show you how to buy Foxconn stock. You will learn how to evaluate its financial health, understand its industry position, and choose the right brokerage platform. Whether you are experienced or new to investing, this information will help you make smart decisions in Foxconn stock investing.

Step 1: Buy ADRs for Hon Hai Stock

You can buy Hon Hai’s stock to invest in its Foxconn division using several different methods, but keep in mind that knowing how to trade is just as important as choosing the right broker. 

The easiest way to invest in Foxconn for U.S.-based individuals is by purchasing American depositary receipts (ADRs) or global depositary receipts (GDRs) for Hon Hai stock. These financial instruments are designed to make buying and selling foreign stocks easier, especially for U.S.-based investors. 

A depositary receipt is a negotiable instrument issued by a depositary bank that represents shares in a publicly-traded foreign company. Depositary receipts typically trade on major exchanges like the New York Stock Exchange (NYSE) and the NASDAQ Exchange (NASDAQ).

Since the listing requirements for the two aforementioned exchanges can be unrealistic for some international companies, many ADRs and GDRs trade on the pink sheets or over-the-counter market (OTCMKT) instead. 

You can buy ADRs for Hon Hai stock via any reputable U.S. stockbroker that has access to the OTCMKT electronic exchange. You may even be able to buy Hon Hai ADRs through free stock trading brokers like Webull or Robinhood, so check with them if you already have an account to see if they will allow you to trade pink sheet stocks. 

Other U.S. brokers you might want to check out are E*TRADE and Charles Schwab that both allow traders access to the OTCMKT exchange. Due to the high risk involved in pink sheet stocks, E*TRADE asks customers to sign a special agreement to trade them. Both brokers provide a user-friendly trading platform and research resources.

Step 2: Open an Account with an International Broker

Some online brokers that will accept U.S.-based clients provide international brokerage services that allow access to many foreign markets and they even support accounts in several currencies. Oversight for U.S. brokers is performed by the U.S. Securities and Exchange Commission (SEC) for equities trading and by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC) for futures, commodities and forex trading. 

For example, Interactive Brokers is a U.S.-based international broker with the widest access to foreign markets of any online broker. It lets you trade multiple assets in over 120 exchanges around the globe regardless of where you’re located, since it accepts clients from all over the world. Interactive Brokers’ advanced trading platform is called Trader Workstation (TWS), and you can consolidate different account types and trade and track multiple assets in different markets. 

You have your choice of buying Hon Hai stock through U.S. ADRs, directly from the Taiwan Stock Exchange or via mutual funds and exchange-traded funds (ETFs). This broker’s minimum deposit is $10,000, but you’ll get some of the best margin and commission rates in the business. Also, you may get charged an inactivity fee if your account remains idle, so expect to do some trading if you pick this broker. 

Other U.S.-based brokers with access to international trading include Charles Schwab that offers an International account with a minimum initial deposit of $25,000. Fidelity Investments has no minimum deposit and offers excellent mutual funds and access to foreign markets.

Step 3: Buy an ETF or Mutual Fund

Another method of buying Hon Hai stock involves buying an ETF or mutual fund that includes the stock in its holdings. For example, an ETF that invests exclusively in Hon Hai stock is called the Hon Hai Precision Industry Co. ETF. This ETF trades in the U.K. under the symbol HHPD.  

• ETFs that trade in the U.S. and include investment in Foxconn include: 
• iShares MSCI Taiwan ETF (EWT)
• SPDR MSCI Taiwan Quality Mix ETF (QTWN)
• Deutsche X-trackers MSCI Emerging Markets High Dividend Yield Hedged Equity ETF (HDEE)
• First Trust Taiwan AlphaDEX Fund (FTW)

Step 4: Open an Account with a Taiwan-Based Stockbroker

This option may not be suitable for you unless you’re familiar with the standard Mandarin language used in Taiwan and have knowledge of how financial markets operate there. Before you can open an account with a stockbroker based in Taiwan, you’ll need to register online with the Taiwan Stock Exchange (TWSE) to obtain a Taiwanese investor ID and tax ID.  

Once you have received those IDs, you must open an account with the Taiwan Depository Clearing Corp. You can then open a securities account with a TWSE-approved and regulated stockbroker. You will have to go through a process called “Know Your Client” (KYC), which generally takes about a week to get all your information verified. Next, buy Hon Hai stock on the TWSE to invest in Foxconn.

Best Online Brokers

Here's a quick look at our favorite online brokers where you can buy Foxconn stock.

History of Foxconn

Based in Tucheng, New Taipei, Taiwan, Hon Hai Precision Industry Co. originally began as an electrical component manufacturer. The company has evolved to become the world’s largest electronic manufacturing service and the largest private employer in Taiwan. 

Terry Gou founded Foxconn’s parent company Hon Hai Precision in 1974 with just $7,500. He based his company on his vision of manufacturing electronics products that almost anyone could afford. 

The Foxconn Technology Group division of Hon Hai is now the leader in joint design, development, manufacturing, assembly and after-sales logistics and services to the world leaders in the 3 Cs: computers, consumer electronics and communications.

Foxconn’s vertically-integrated, one-stop business model is called e-enabled Components, Modules, Moves and Services (eCMMS) and it streamlines every step of the manufacturing process to offer a complete solution tailored to the needs and specifications of Foxconn’s clients. 

Foxconn’s eCMMS model offers client solutions that range from tooling, molding, components, systems assembly, design, manufacturing, maintenance and logistics. The company is the most trusted name for contract manufacturing services, including computerized maintenance management systems (CMMS), certified energy managers (CEM), electronics manufacturing services (EMS) and original design manufacturing (ODM). 

Apple Inc. (NASDAQ: AAPL) is Foxconn’s largest customer and Foxconn manufactures its iPhones and other devices in mainland China and India. Foxconn also manufactures electronics under its own subsidiary brands of Sharp, Linksys and Belkin, in addition to servicing other major clients.

These include Amazon.com (NASDAQ: AMZN), Nintendo (OTCMKTS: NTDOY), Cisco (NASDAQ: CSCO), HP (NYSE: HPQ), Microsoft (NASDAQ: MSFT), Intel (NASDAQ: INTC), IBM (NYSE: IBM) and Sony (NYSE: SNE).  

A 5-year chart of Hon Hai’s stock price. Source: TradingView.

Why Should You Invest in Foxconn?

Investing In Foxconn, also known as Hon Hai Precision Industry Co., Ltd., is a good opportunity for investors. Foxconn is a leader and well-known for assembling products for major tech companies like Apple. The technology sector is growing quickly, and Foxconn is focused on innovation. The company is also targeting emerging markets and electric vehicles. As technology use increases, Foxconn's strong supply chain and efficiency help meet rising demand. Understanding Foxconn's advantages is important for making smart investment decisions.

Industry Leader

Foxconn, also known as Hon Hai Precision Industry Co., Ltd., is a major player in global electronics manufacturing. It is the largest electronics manufacturing services provider in the world. Foxconn is the fourth-largest information technology firm globally by revenue, behind Apple, Alphabet, and Samsung. This ranking shows its scale, expertise, and efficiency in manufacturing. The company has built a strong reputation over the years. For over a decade, it has been ranked first among Taiwanese enterprises by Taiwan Ratings. CommonWealth Magazine also named it the top company among 2,000 Taiwanese firms. This recognition is important for potential investors. It signals that Foxconn is not just a market participant but a leader with a successful track record.

Multiple Growth Drivers

Foxconn is adapting to changes within the technology manufacturing industry. The company is expanding its production capabilities, especially into emerging markets. Recently, Foxconn started manufacturing Apple products in India. This move takes advantage of India’s increasing consumer base and favorable government policies for domestic manufacturing. It also helps reduce risks from supply chain issues and improves operational flexibility.In addition, Foxconn received approval to invest $551 million into two projects in Vietnam. These projects focus on producing smart entertainment products and smart-system equipment. This aligns with the global trend toward smart technologies and connected devices. By diversifying its manufacturing locations, Foxconn aims to access new revenue streams and meet the rising demand for innovative consumer electronics. This expansion shows Foxconn's commitment to staying ahead of industry trends and ensuring sustainable growth.

Attractive Stock Valuation

Investing in Foxconn's stock can be a great opportunity for growth and income. Right now, Hon Hai's stock is priced at about $11.38 per share. This is well below the $13 mark, making it a good entry point for investors. Since March 2024, the stock has been rising steadily. This shows renewed investor confidence and a positive outlook for the company. Additionally, the HNHPF American depositary receipt (ADR) offers a dividend yield of 1.79% per year. This dividend provides passive income and reflects the company’s strong cash flow. Overall, the attractive price, growing dividend, and positive market position make Foxconn’s stock a promising investment for those seeking growth and income.

Considerations Before Investing in Foxconn

Before investing in Foxconn, it's important to consider several factors. Foxconn, or Hon Hai Precision Industry Co., Ltd., is a major global electronics manufacturer. It assembles products for leading technology companies. Investors should assess the company’s financial health and market position. Geopolitical risks and supply chain dynamics also matter. It’s essential to understand Foxconn’s growth strategies and technological advancements. Additionally, the company's response to industry changes can indicate its long-term viability. Investors should evaluate the ethical aspects of its labor practices and environmental policies. These can affect reputation and regulatory compliance. By analyzing these factors, investors can make smarter investment decisions regarding Foxconn.

Global Economic and Stock Market Downturn

Investors need to be aware of how a global economic downturn can impact Foxconn's business and stock. Economic slowdowns often lead to lower consumer spending. This reduces demand for electronic devices. Recently, the slowdown in the Chinese economy has hurt Foxconn's stock price, showing the risks tied to economic changes. However, Foxconn has some defensive qualities. Its diversified client and product portfolio can help shield it from specific market declines. The company is also adapting to market shifts. For example, it has put its new $8.8 billion LCD manufacturing plant in Guangzhou up for sale. This shows the challenges in China's current economy and Foxconn's ability to manage its assets effectively.

Effects of the U.S./China Trade War

The U.S./China trade war increases risks for Foxconn. A large part of its manufacturing is still in mainland China, where it makes iPhones and other devices. Tariffs and trade restrictions could raise production costs and hurt profit margins. Foxconn's dependence on Chinese manufacturing creates uncertainty for its operations and stock performance. To address these challenges, Foxconn may diversify its manufacturing locations. While it has a strong presence in China, the company is looking to invest in facilities in Vietnam and India. This shift aims to reduce the impact of tariffs and improve service for its global clients.

Risk of a Slowdown in Apple Product Demand

Investors should note Foxconn's heavy reliance on Apple Inc. for revenue. More than half of Hon Hai's revenue comes from manufacturing Apple products. This dependence exposes Foxconn to fluctuations in Apple's performance and demand. A slowdown in demand for Apple products could severely impact Foxconn’s finances. To address this risk, Foxconn is considering moving some manufacturing operations to Vietnam. The goal is to diversify its production strategy. Foxconn has also started producing Apple devices in India. These actions aim to reduce risks from relying on one client and to explore new markets with growth potential.

Final Thoughts on Investing in FoxConn

The easiest way to invest in Foxconn from the U.S. is generally by buying Hon Hai stock using its OTC-traded ADR. You can trade Hon Hai ADRs and GDRs, as well as ETFs that contain Hon Hai holdings using any reputable online stockbroker that has access to ETF trading and trading in pink sheet stocks.

The next best option involves going through a U.S.-based international broker like Interactive Brokers where you can buy Hon Hai stock directly from the TWSE. The most cumbersome option for a U.S. investor would definitely be opening an account with a local stockbroker in Taiwan due to the extra steps involved.  

Frequently Asked Questions