Hon Hai expected to post 30% sales growth in Q1

Taipei, Jan. 24, 2005 (CENS)--Hon Hai Precision Industry Co., Ltd., Taiwan's leading information technology (IT) firm, recently said it would secure a 30% annual sales growth in the first quarter of this year based on the expected lingering booming demand globally.

It is expected Hon Hai would be able to excel rival Flextronic Corp. as the world's largest electronic manufacturing service provider based on last year's revenue.

The parent of Hon Hai registered NT$413.4 billion (US$13 billion at US$1:NT$31.8) in revenue last year. If the revenue of over NT$100 billion (US$31.4 billion) posted by its subsidiary Foxccon International Holding (FIH) is added, then Hon Hai would see combined sales break the NT$500 billion (US$15.72 billion) mark last year, ranking as the world's largest EMS provider.

An institutional investor noted Hong Hai has become Taiwan's largest contract manufacturer of cell phones, outstripping rival BenQ Corp. and Arima Communication Corp. It is expected Hon Hai shipped over 30 million cell phones last year.

But Terry Guo, chairman of Hon Hai, said the market prospects for consumer electronics seems to be very bright despite the slowdown in sales at the end of last year.

Although the recent volatility of foreign exchange rates has adversely affected the operations of most IT firms, Guo said his company has carried out a strict internal-control measure to slash the possible losses caused by forex fluctuations.

Although Hon Hai has been making overseas investment deployment in recent years, Guo said his company would not set up a production facility in India until two or three years later. He said there are many variants in India's taxation system and regulations concerning foreigner investments. The company wouldn't immediately launch production until India completes the formulation of new taxation system and relevant regulations concerning foreigner investments.

Nevertheless, Hon Hai will begin making investments in India on a trial basis by setting up a software research and development center and a mold fabrication hub this year.