Hon Hai Precision Industry Co (鴻海精密) claimed the No.2 ranking, up two notches, among the world's top electronics manufacturing service (EMS) providers due to better cost structure and technologies, researcher Inter-national Data Corp (IDC) said yesterday.
The top Taiwanese computer peripheral maker outranked Sanmina-SCI Corp and Solectron Corp with strong revenues last year, according to IDC's latest report released yesterday. Hon Hai now is behind only Singapore-based Flextronics International Ltd.
"Hon Hai is not as diversified among the industry segments as most other tier-one EMS vendors are. It instead chooses to focus on select industry segments in which it has a cost and technology advantage," said Flint Pulskamp, a program manager with IDC, in the report.
Hon Hai's revenues last year grew 26 percent to US$12.9 billion, outpacing the 13-percent increase for the EMS industry, according to IDC's statistics.
The company's revenues made up about 12 percent of the total revenue of US$105.5 billion for the EMS industry last year, lagging behind the bigger 15-percent share Flextronics grabbed.
Looking ahead, Pulskamp said Hon Hai would continue to focus on communications, networking and mobile phones.
Hon Hai's strong operating performance also prompted Taiwan Ratings Corp (
"The rating action reflects Hon Hai's consistent sales and profit growth, and successful customer and product diversification," said Tony Tsai (蔡東松), a senior analyst with Taiwan Ratings, in the report released yesterday.
Its return on net capital averaged about 30 percent in the period from 2002 to last year, supported by robust volume growth that helped offset margin pressure resulting from strong customer bargaining power, Tsai said.
Further strong sales growth is expected over the medium term.
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