The company is diversifying further, taking a stake in a NT$10 billion flat-panel venture that will be 50 percent privately owned by its chairman. Kuo sold some of his shares in Hon Hai to take a stake in the venture, Innolux Display Corp, which will make screens for wall-mounted televisions and other products.
The company's gross margin fell to 14.7 percent last year from 29.6 percent in 1998 as it increased the proportion of lower-margin contract manufacturing sales.
Hon Hai's return on equity was 27 percent last year, the highest of Taiwan's 20 largest companies by sales. The company's sales may rebound in the third quarter. It reported July sales of NT$28 billion, 31 percent higher than the same month a year ago.
"I have always been concerned about their transparency, but they always make money," said Michael Ding (
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