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UPDATE 1-Foxconn's Gou retains board seat on proposed board - source

Yimou Lee

(Adds candidates)

TAIPEI, May 10 (Reuters) - Terry Gou, chairman of Apple supplier Foxconn, will retain a seat on the company's proposed board, a source with knowledge of the matter told Reuters on Friday, as he plans to run for Taiwan's presidential election.

Gou announced last month that he would contest Taiwan's presidential election in January, seeking to represent the China-friendly opposition Kuomintang (KMT) party - a vote that comes after a period of increasing tension between Beijing and Taipei.

Gou's election bid came after he told Reuters in April that he planned to step down from Foxconn to pave the way for younger talent to move up the company's ranks.

It is not immediately clear whether Gou will resign from his role as chairman of the board.

The proposed candidates for the new company board, which include Lu Sung-Ching, the chairman of Foxconn Interconnect Technology Ltd, and Sharp Corp's chairman Tai Jeng-wu, is subject to approval from a shareholder meeting in June, before a new chairman is elected.

Analysts said Gou's election bid might be weighed down by his ties to a Chinese leadership that refuses to renounce the use of force to unify with self-ruled Taiwan it considers a wayward province.

Shares of Foxconn fell 0.7% on Friday, lagging the benchmark share price index's 0.2% decline. They are up about 18% this year after falling 30 percent last year. (Reporting by Yimou Lee in Taipei; editing by Louise Heavens)