Fri, Jun 26, 2015 - Page 13 News List

Hon Hai eyeing 10 percent growth

By Lauly Li  /  Staff reporter

Hon Hai Precision Industry Co chairman Terry Gou speaks at a news conference in Urayasu, Japan, on Thursday last week.

Photo: Bloomberg

Hon Hai Precision Industry Co (鴻海精密), which assembles Apple Inc’s iPhones, aims to grow revenue by 10 percent this year from last year’s NT$4.12 trillion (US$132.68 billion), on the back of the firm’s close relationships with its major client and optimism in smartphone industry, chairman Terry Gou (郭台銘) said yesterday.

“We have worked with our main client since it started rolling out its first-generation product... Our relationship with the client will only grow closer and closer,” Gou told shareholders at the firm’s annual general meeting in New Taipei City.

Gou’s remarks were in response to shareholders’ questions about Hon Hai’s strategies against rising competition in the market and the possibility of losing orders from Apple.

“We are the main assembler for [Apple] and we expect to receive growing orders from it,” he said.

Gou said Hon Hai receives 100 percent of order allocation for Apple’s larger-sized display smartphone, while the client’s other assembler only receives “some” orders for smaller-sized screen handsets.

Hon Hai is ahead of the other assembler in terms of technologies and the relationship it has with Apple, Gou said, adding that the firm’s rival is only a “spare tire” to the client.

Gou’s remarks referred to Taiwanese manufacturer Pegatron Corp (和碩), which saw record-high annual revenues of NT$1.02 trillion last year, driven by increasing orders from Apple for its iPhone assembling business.

However, HSBC Holdings PLC said in a report on Wednesday that it foresees Hon Hai’s annual revenue growing only 6.88 percent — weaker than Gou’s aim — to NT$4.5 trillion this year.

Commenting on Hon Hai’s non-smartphone segments, Gou said investments in China, India and robotics businesses would become the firm’s growth drivers.

Hon Hai plans to allocate 10 percent of its employees in China to sell smartphones there in a bid to secure a share in the Chinese market, he said.

Hon Hai also plans to use 20 percent to 30 percent of its resources to invest in startups around the world, Gou said, adding that the firm would build startup incubator centers in Beijing, Hangzhou and Shenzhen to support new companies.

Hon Hai sees India as an emerging country that has business growth potential, Gou said, adding that the firm is in the process of investing in the e-commerce, clean energy and manufacturing sectors there.

With the company potentially providing financial aid to Japanese electronics maker Sharp Corp, Gou said Hon Hai is still waiting for a final decision.

“I am sure they [Sharp] will make the right decision. We will wait until Sharp’s management and the Japanese government feels comfortable with the investment,” he said.

“Japanese companies are our friends. We can support each other to compete against South Korean technology companies,” he said, adding that he is optimistic that Sharp will accept investment from a Taiwanese company rather than a South Korean company.

Hon Hai shares rose 1.43 percent to NT$99 in Taipei trading yesterday, outperforming the TAIEX, which gained 0.84 percent.

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