Hon Hai Precision Industry Co (
Net income may rise 9.2 percent to NT$8.3 billion (US$257 million), from NT$7.6 billion a year earlier, according to the median estimate of five analysts surveyed by Bloomberg News.
Sales, announced earlier, gained 62 percent to NT$141.7 billion.
Chairman Terry Gou (
"Hon Hai is the model citizen among Taiwan's made-to-order electronic manufacturers," said Mike Shiao (
Taipei-based Hon Hai, which is required to report results by the end of this month, said on June 14 that demand in the third quarter will be "particularly good" as companies start preparing inventories of consumer electronics before the year-end holiday season.
Global sales of mobile phones will rise faster than previously expected this year as consumers snap up handsets with cameras and music players and demand increases in countries such as India, according to Stamford, Connecticut-based researcher Gartner Inc. Handset makers will sell 779 million mobile phones in 2005, according to Gartner.
Shares of Hon Hai have gained 16 percent so far this year, compared with a 9 percent gain in the nation's TAIEX index.
Even so, profit margins are thinning amid increased competition. Singapore-based Flextronics International Ltd, the world's largest contract electronics manufacturer, is the biggest competitor of Hon Hai.
Flextronics supplies mobile phone handsets to companies such as Sony Ericsson Mobile Communications Ltd and the Xbox videogame console for Microsoft Corp.
The handset and game console business is "competitive, and margins on these products are likely to face downward pressure," Kirk Yang (
Yang forecasts Hon Hai's net income margin will fall to 3.7 percent in 2006 after it dropped to 4.5 percent this year from 5.5 percent last year and 6.2 percent in 2003. Profit margin is the percentage of sales that a company earns after subtracting costs.
Most of the growth will come from "lower-margin products," Yang wrote in the report. "Hon Hai can continue its double-digit sales growth in the next few years."
Hon Hai's main business of making desktop computers is also facing slimmer margins. Hewlett-Packard Co is Hon Hai's biggest client, accounting for as much as a quarter of its sales, according to Yang.
In the second quarter, the average selling price for a desktop computer fell 11 percent to US$850 from US$960 a year earlier, George Shiffler, an analyst at Gartner said.
The average price for a notebook dropped 12 percent to US$1,325 from US$1,500, according to the research firm.
"PC-related products are still Hon Hai's main source of revenue, which is an ultra-competitive sector," Shiao said.
PC unit shipments will increase 12.7 percent in 2005 as lower prices and enhanced wireless Internet hookups are driving demand, according to Gartner. Worldwide PC revenue is expected to rise 0.5 percent this year.
Hon Hai may book a one-time profit from disposing of shares in its mobile-phone arm, Foxconn International Holdings Ltd (
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained