Hon Hai Precision Industry Co (鴻海精密), the biggest assembler of Apple Inc’s iPhones, yesterday posted an 80 percent quarter-on-quarter increase in net profit for last quarter to NT$30.66 billion (US$1 billion), backed by robust sales of the iPhone 11 series.
That translates into earnings per share of NT$2.21, compared with NT$1.23 the previous quarter.
The company also benefited from subsidiary FIH Mobile Ltd’s (富智康) turnaround.
FIH makes products for Xiaomi Corp (小米), Oppo Mobile Telecommunications Corp (歐珀) and Huawei Technologies Co (華為), Hon Hai said.
FIH posted a net profit of US$20.03 million last quarter following net losses of US$84.08 million in the first half of the year, Hon Hai said.
In the July-to-September quarter, Hon Hai posted a 20 percent sequential increase in revenue to NT$1.39 trillion, while gross margin and operating margin improved slightly to 6.01 percent and 2.41 percent respectively.
Speaking at an investors’ conference at the company’s headquarters in New Taipei City’s Tucheng District (土城), Hon Hai chairman Young Liu (劉揚偉) vowed to boost the company’s gross margin from 6 percent to 10 percent within the next three to five years as it looks to expand into three industries.
“We are targeting electric vehicles, digital health and robotics as the three industries are estimated to reach US$1.2 trillion to US$1.3 trillion by 2025,” Liu said, adding that the compound annual growth rate is estimated at 20 percent.
Hon Hai aims to capture a market share of up to 10 percent in each of the three industries by investing about NT$10 billion per year, while increasing capital expenditure to about NT$65 billion, he said.
Underlining the company’s ambition to transform itself into a wholly digital company, Liu said Hon Hai would focus on improving core technologies, such as artificial intelligence, semiconductors, and 5G and 6G-related applications.
Providing a moderate outlook for this quarter, Liu said the company’s consumer and smart product segment, which contributed 49.2 percent to overall revenue last quarter, would improve on a quarterly basis, but decline on an annual basis because of a high comparison base last year.
Sales within the segment are nonetheless expected to increase next year, Liu said, assuming that the US-China trade dispute would settle down and no longer be a factor.
Liu added that the company has 16 main production sites across the globe, “which are ready to be expanded on clients’ demand.”
The company in September partnered with Apple to invest US$1 billion in India to expand local production of iPhones, and last month started production of the iPhone XR at its plant near Chennai, media reports said.
Liu also holds high hopes for Hon Hai’s corporate product segment, including servers and networking products, the company’s second-most important segment in terms of revenue (22.9 percent), with sales forecast to grow by 5 to 10 percent next year.
“5G deployment is going to be big next year ... but before that, a lot of infrastructure needs to be ready,” Liu said, adding that demand for such infrastructure would drive business growth.
STEPPING UP: The firm has also asked employees to work in split shifts from this week and to halt all but essential overseas business travel from next month Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has implemented a remote work policy for employees not on production lines in an attempt to curb the spread of COVID-19, the world’s largest contract chipmaker said yesterday. This is the first time in the Hsinchu-based company’s history that it has launched a large-scale remote work policy, joining global technology companies, such as Apple Inc and Google, that encourage employees to work from home. The chipmaker has also asked employees to work in split shifts from this week, it said. As the number of virus infections continues to climb worldwide, TSMC has urged employees to halt unnecessary
A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside. As COVID-19 grips the world, it might just be the safest place to work right now. The teams belong to ASML Holding NV, which holds a de facto monopoly on the industry of
DBS Bank Ltd yesterday hacked its GDP growth forecast for Taiwan this year to 0.9 percent, down from its estimate of 2.3 percent two months earlier, in light of the COVID-19 pandemic and increasing financial market volatility. The bank’s latest forecast was even lower than London-based IHS Markit Ltd’s estimate of 1 percent, while other research institutes’ projections range from 1.6 percent to 2.6 percent. Taiwan’s economic momentum is being negatively affected by the pandemic, DBS said. The rapid spread of the disease from Asia to Europe and the US has dampened the bank’s previous expectation of a “V-shaped” global rebound in the
DOWNSIDE RISKS: Firms have a ‘very low’ chance of boosting investment returns in the next two years, making it hard for them to improve their capitalization, an analyst said Taiwanese life insurers wanting to improve their capital structure face strong headwinds this year, given prolonged low interest rates and economic impacts derived from trade protectionism and the COVID-19 pandemic, Taiwan Ratings Corp (中華信評) said on Friday. The local life insurance sector also still has high asset risks and such risks are susceptible to market volatility, the local arm of Standard & Poor’s Global Ratings said. Since last year, major financial holding companies — including CTBC Financial Holding Co (中信金控), Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) — have announced plans to raise fresh capital to