Investor update

Oct 19, 2026

Slides

Summary

A 50% investment by Lin Yin International Investment establishes an alliance with Hon Hai for joint operation of the automotive equipment business. The partnership combines EV manufacturing and design with powertrain, autonomous-driving and in-vehicle technologies, targeting JPY 1 trillion by 2030.

The briefing on the strategic alliance with Hon Hai Precision Industry for joint operation of automotive equipment business. Let me introduce the speakers today. From Hon Hai Precision Industry, CSO in charge of the EV business, Mr. Jun Seki. From Mitsubishi Electric Corporation, Executive Officer, Vice President, and Area Owner of Industry Mobility Business, we have Mr. Kunihiko Kaga. From Mitsubishi Electric Mobility Corporation, the President, Kazunori Tanaka. First, the three companies will present on the strategic alliance for the joint operation of the automotive equipment business. First of all, I'd like to invite Vice President Kaga of Mitsubishi Electric Corporation. Good morning. I am Kaga from Mitsubishi Electric. I am the Industry Mobility Business Area Owner. I will begin by explaining the overview and background of today's announcement. Please turn to page six. First, an overview of today's press conference. As announced in our news release on October 16, we have agreed to accept a 50% investment in Mitsubishi Electric Mobility, which runs our automotive equipment business, from Lin Yin International Investment, the investment management company of the Hon Hai Precision Industry Group. As I will explain in detail later, Mitsubishi Electric Mobility will draw on its strength in three areas to contribute to the development of Hon Hai's EV platform and to the wider adoption of next-generation mobility. In addition, by strengthening and expanding its core businesses through this strategic partnership with Hon Hai, Mitsubishi Electric Mobility aims to become a JPY 1 trillion company by 2030. By providing a high-quality EV platform developed here in Japan for the world, we will contribute to strengthen Japan's industrial base and to the sustainable growth of the automotive industry. Please turn to slide seven. From here, let me explain how our collaboration with Hon Hai Precision Industry came about. For Foxconn with Hon Hai in November last year, we signed a memorandum of understanding on collaboration in the AI data center business. We then expanded the scope of our collaboration to automotive equipment through various discussions, which brings us to today. Please turn to slide eight. Now, I will explain the background and purpose of this collaboration. Until now, competitiveness in the automotive industry has come from advanced engine integration technology, and these capabilities require years of experience and accumulated know-how, and they have been a major strength of a limited number of companies. This is on the left side of this slide. However, as you all know, as electrification advanced, the sources of competitiveness are beginning to shift. This is on the right-hand side. As a result, the EV-only manufacturers are entering the market, and this major change in the competitive landscape is opening up new opportunities for growth. To seize this opportunity, the Mitsubishi Electric Group and Hon Hai Precision Industry will combine our strength and, as best partners, pursue optimal investment. Through this, we hope to maintain and strengthen Japan's industrial base, and beyond that, contribute to establish an EV platform from Japan. Please turn to slide nine. This will be the last slide from my side. This is about the transaction, which has already been explained in the executive summary. Here, I will focus on the lower part of the slide, the impact on Mitsubishi Electric's results for this fiscal year. In our consolidated results for this fiscal year, we expect to record an impairment loss of approximately JPY 100 billion. For a consolidated earnings forecast, this is still under review, including other factors. Based on the outcome of this review, on the 30th of this month, we plan to announce a full-year consolidated forecast for fiscal 2026. Let us move to the business strategies of both companies. This is all from my side. Thank you. Next, about the business strategies of the two companies. First, I'd like to invite Mr. Seki, CSO of Hon Hai Precision Industry. I am Seki from Foxconn. Before introducing myself, as usual, we call our company Hon Hai Precision Industry or Foxconn. Of course, the official name is Hon Hai. It's been 52 years since the foundation. We started as a very small connector company. We were small, but we wanted to be fastest and most agile company in the world. Because of that, we chose the name of Fox and Fox Connector and Foxconn for short. It's like a nickname. Since we use the Chinese characters, we call ourselves Hon Hai, and in the non-Chinese character country, we call ourselves Hon Hai. This is my introduction. I worked at Nissan and Nidec, and in February 2023, I joined Foxconn. It's been 3 and a half years. I started in my career in 1986, and I've been in this industry for 40 years, and I'm getting a little bit old, but I have unstoppable passion, so I continue to move forward with enthusiasm. As Mr. Kaga mentioned at the outset, last year's revenue was JPY 41.3 trillion, so it's getting much bigger. But the growth, I think, is the driving force of the company. Just like an airplane, in order for the airplane to be steady, we need the sufficient thrust, and that needs sustainable growth. We need to continuously grow. In order to prepare for the further growth, we have this 3+3+3, which is the medium-term business plan. The first 3 is the areas that we have chosen from the left, EV, digital health, and robotics. Those are the new business areas. The second 3 is the enabling technology, common technology from the left, AI, semiconductor, and next-generation communication. The last 3 means that we start to see the platform. By combining all of those technologies, we want to increase the functionality and the convenience of the customers. We want to create a platform of it. In any case, we talk about the connecting enabling technology called Nexus, and we want to use AI so that we can develop the Nexus further to contribute to the society. Of course, today we are focusing on the EV topic. This is our EV strategy. There are a lot of things written, but I'd like you to see 3 things. Just like the Foxconn itself, EV is, of course, based on the contract manufacturing, so CMS, or Contracted Manufacturing Service. However, when you look at the auto industry, there are some characteristics which is different from electronic industry. So in addition to the manufacturing, we added design or D, so CDMS. We also do the designing in addition to manufacturing. Design capability is something that we like to show. We have a reference design of EVs. The second is the BOL, which is at the lower part. This is Build, Operate, Localize. It is not just the auto industry, but the localization usually happens in other industries. But in our case, we are very particular about the local brand, so to work with the Japanese brand. This is our second characteristic. The last part is that in the area of the contract manufacturing, it is difficult to maintain the sustainability if you focus on the manufacturing. You need a certain level of vertical integration, so component, module, platform from the left, and then after sales. We need to work on all of those. Needless to say, the collaboration and alliance with Mitsubishi Electric is to enhance the components and module. Instead of doing everything on our own, we want to enhance it through the alliance and collaboration. This sounds a bit repetitive, but we are the biggest EMS provider. We have been growing. As a next step, we have chosen EV, as shown in the middle. Design and the reference design are the ones that we have been working on. If I may boast about a little bit, on the 31st of October this year, Hon Hai Tech Day will be held in Taiwan, and there we would introduce three new designs. The key topic today is on the right-hand side. How were we attracted to Mitsubishi Electric? Of course, we like the personality of Tanaka-san, but the most attractive part was the electronic control technology. It is not just that, but also there is a wide-ranging software resources. In the auto industry, we all aimed ADAS and SDV, and all the enabling technologies are the ones that Mitsubishi has. That was the biggest attraction. The part at the bottom, this is not something that we can explain fully today, but through Mitsubishi Electric, we work with other partners, and we are starting to see the specific synergies. I cannot really explain everything, but please keep in mind that we are doing this. This is my last slide. On the left, we have Foxconn. On the right, we have Mitsubishi Electric Mobility. The blue is the strength, and the red is the weakness. In the case of Foxconn, we are very fast in developing, and we have a scale advantage, so cost-competitive, and we can do this very quickly. The key points here is that we have a form factor, and we are unusual auto player. Usually, the auto OEMs focus on the auto, and the components need to be broad so that they can use them. But that is not the case with electronics, iPad, PCs, and others. There is always physical constraints and limitation, and if they are used within that, this would be ideal. We are kind of mixing the electronics with the automotive. So, when something is brought to us at the optimum way, then we will design so that we can use the components for the cars. So, we have a form factor strength, and we are unusual player in that sense. This is off the shelf, so to speak. We do not have a customer base of the automotive industry. We are not yet fully trusted. We are building cars, but the component control and software, we still depend on others. In order to avoid them becoming black box, we have to have some of them. In the case of Mitsubishi, of course, Mitsubishi has a strong brand and also has a very good portfolio in the auto industry and also the global production sites and the sales sites. Mitsubishi has a very solid customer base. But development speed is influenced by the customer. Even if you can develop in 2 years, if the customer takes 4 years, you have to go along with it. Because of that, ADAS and SDV, Mitsubishi has very good enabling technologies, but unless they get the order, there's no access to it. As you can see, our red part can be complemented by the strength of Mitsubishi and vice versa. So, we are very compatible in that sense. As I said, the reason why we were attracted and fell in love with Mitsubishi is that this inter-complementarity between the 2 companies, that was the biggest factor. Thank you very much, Mr. Seki, CSO. Lastly, from Mitsubishi Electric Mobility, about the business strategy and the roadmap, President Tanaka from Mitsubishi Electric Mobility will give a presentation. I'm Tanaka, President of Mitsubishi Electric Mobility. I will explain about our business strategy and our main areas of contribution to Hon Hai and our roadmap. First, about our business strategy. We have positioned our businesses with technology that can win globally, specifically electrification-related products, new mobility, electric power steering systems, and driver monitoring systems as our 4 core businesses. We are pursuing a balanced management in which the growth of these businesses is supported by our profitable ICE-related businesses. We have also enhanced our competitiveness by promoting solutions businesses that make use of data. Going forward, by combining the technologies and assets that we have built with synergies with Hon Hai, we aim to strengthen and expand our EV and autonomous driving businesses. This will allow us to deliver value to a wide range of customers and markets, including new mobility areas such as logistics mobility and flying cars, existing customers and service providers, and government-backed overseas brands. Please turn to slide 17. Furthermore, toward realizing the high-quality Japan-made EV platform we are pursuing together with Hon Hai, we will focus on and contribute through 3 areas that leverage our strength: electric powertrain, autonomous driving, and in-vehicle intelligence. Please turn to page 18. First is the electric powertrain, the heart of an EV. For instance, in the inverter-related technology, our group was the first in the world to mass-produce power modules for hybrid cars in 1997. Over roughly 30 years since then, we have continued to improve performance and evolve functionality, and our products have been adopted and trusted in EV platforms around the world. Second is autonomous driving. It is becoming an essential technology for EVs and continues to evolve rapidly. For example, our functional safety and cybersecurity technologies have strength that can accelerate the realization of Level 4. We have a roughly 50-year history of developing vehicle control software, and we have mass-produced more than 120 million units utilizing this technology. The third is the in-cabin control, which is essential to completing autonomous driving. The key technology for this is the driver monitoring system, or DMS. DMS is a technology that accurately estimates the condition of occupants in the vehicle, such as inattentive driving or sudden health problems, and it can also detect children left behind in the car. Our group holds the world's number one market share in DMS, and we are a market leader with a world-class number of patents. Please turn to page 19. Now, let me turn to the future of this company. Please turn to slide 20. This is our roadmap. Looking at the near term, building on the earning power of existing businesses, starting with the ICE-related business I mentioned earlier, we will continue steady operations while also aggressively winding down unprofitable businesses. As a result, we expect a significant improvement in profitability with an adjusted operating margin of 9.3% in the year ending in March 2027. We will further accelerate this momentum through agile business operations enabled by the strategic partnership. Beyond synergies with Hon Hai, we will strengthen and expand our core businesses, aim to become a JPY 1 trillion company by 2030, and achieve even greater profitability. Please turn to the next slide. This will be my last slide. Let me show you the vision we are aiming for beyond the roadmap. With Hon Hai and Mitsubishi Electric Mobility, we will provide a high-quality EV platform from Japan and contribute to the adoption and development of next-generation mobility. In this way, we will connect the advanced technology and quality cultivated by Japanese manufacturing to new value in mobility, supporting the strengthening of Japan's domestic industrial base and the sustainable growth of the automotive industry. Over the medium to long term, we aim to bring Japanese technology and quality to global markets, further enhance the value of made in Japan or made by Japan, and show the world new possibilities of Japanese manufacturing. To make this a reality, our two companies will join forces and move forward to the next stage of growth. That's all from me. Thank you for your attention.