Hon Hai buys Mexican factory from Motorola

By Lisa Wang  /  STAFF REPORTER

Sun, Oct 19, 2003 - Page 1

Hon Hai Precision Industrial Co(鴻海精密), a leading Taiwanese electronics component maker, has signed a US$18 million contract to buy a cellphone manufacturing plant in Mexico from Motorola, the company said in a statement released late on Friday.

The deal will make Hon Hai Motorola's biggest handset original equipment manufacturing partner as Hon Hai is expected to land orders for 10 million handsets from Motorola by the end of this year, according to Chinese-language media citing unspecified analyst's yesterday.

"With the purchase deal, Hon Hai will get a stronger presence in the wireless communications sector ...," the company said in a statement on the Taiwan Stock Exchange Web site.

Hon Hai has also signed a long-term manufacturing contract with Motorola, the world's second-largest handset maker, the company said.

Hon Hai said the deal will be completed within 90 days, but declined to reveal details about the contract.

The purchase is Hon Hai's latest move to aggressively tap into the mobile phone market after acquiring Finland's mobile phone casing maker Eimo Oyj in May. Hon Hai currently holds 93.4 percent in the Finland concern.

In addition to Motorola, Hon Hai also assembles handsets for Nokia Oyj, the world's largest mobile phone vendor.

Hon Hai mainly produces electrical connectors and assembles personal computers for Dell and Hewlett-Packard, but is aggressively tapping into promising sectors such as mobile phone and flat-screen liquid crystal display manufacturing. The local company also produces PlayStation 2 game consoles for Sony.

Hon Hai shares ended unchanged at NT$158 each on the benchmark TAIEX on Friday.

Hon Hai said sales in September hit a historical high to NT$36.59 billion, a 60-percent jump from a year earlier. The accumulated sales during the first three quarters reached NT$220 billion.