Mon, Nov 25, 2019 - Page 16 News List

Hon Hai brings NT$7bn home for 5G investment

Staff writer, with CNA

Hon Hai Precision Industry Co (鴻海精密) on Thursday said it had remitted NT$7 billion (US$229.4 million) to Taiwan from overseas to raise its stake in subsidiary Asia Pacific Telecom Co (APT, 亞太電信).

The world’s largest contract electronics maker said that it would use the funds to push its initiative to develop 5G technology through APT.

Two weeks ago, Hon Hai said that it would invest NT$10 billion to buy 1 billion APT shares by participating in a private placement, although it was unclear whether this latest investment was part of that previous announcement or was a separate investment.

The originally planned NT$10 billion investment would have increased Hon Hai’s stake in APT to 40.74 percent from its current 19.70 percent holding.

Hon Hai also did not identify the source from which the funds were remitted, but did say that it was taking advantage of a newly revised law that took effect in mid-August encouraging Taiwanese firms to move their retained earnings held overseas back to Taiwan.

Under the revision, the government would tax retained earnings that returned at a low preferential rate rather than at the standard corporate income tax rate.

Hon Hai, which has invested heavily in 5G technology development and equipment, said that it expected to help APT upgrade its facilities to meet its needs in a future 5G environment.

The government has designated next year as the first year of the 5G era and is planning an auction of the 5G spectrum next month.

All five major telecom operators have signed up to participate in the 5G tender, and Hon Hai is teaming up with APT to improve its chances in the auction.

The two companies would continue to invest in building broadband communication facilities, Hon Hai said, adding that they would begin to invest in mobile broadband technology in January and complete the construction of a mobile broadband network within two years.

Hon Hai’s 5G plans are part of its overall plan to transform itself from a pure hardware manufacturer into a tech company, integrating its manufacturing capabilities with resources to develop software.

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