Hon Hai Precision Industry Co’s (鴻海精密) sales for this quarter might be flat from the second quarter, it said yesterday after reporting better-than-expected profit for last quarter.
At an investors’ conference in Taipei, chairman Young Liu (劉揚偉) projected revenue for the company, known globally as Foxconn Technology Group (富士康科技集團), would be flat sequentially this quarter, but would increase by 3 to 15 percent year-on-year, amid a possible resurgence of COVID-19 in Asia and uncertainty over the Delta variant of SARS-CoV-2.
“The components shortage will not get better for the second half of the year, but Hon Hai is insulated because we focus on our major customers,” Liu said. “What’s more important to watch for is the impact on the global ICT [information and communications technology] supply chain if the COVID-19 situation deteriorates in Asia.”
Photo courtesy of Hon Hai Precision Industry Co via CNA
Sales at the company’s consumer electronics business, which includes Apple Inc’s iPhone, are projected to decline this quarter compared with the previous three months, Hon Hai said.
Liu said that high comparison numbers in the previous quarter, as well as product transitioning, would result in a slight sequential sales decline in the consumer electronics unit, but total revenue would be little changed sequentially.
The company reported net profit of NT$29.8 billion (US$1.07 billion) in the second quarter, up 6 percent quarter-on-quarter and 30 percent year-on-year. Earnings per share were NT$2.15, up from NT$1.65 a year earlier. Consolidated revenue was NT$1.35 trillion last quarter, up 0.3 percent quarterly and 20 percent annually.
To ensure sufficient supplies, Hon Hai has struck various semiconductor pacts.
It last week announced that it would acquire a mature 6-inch wafer plant from Macronix International Co (旺宏). In May, the company said it was to set up a joint chip venture with Yageo Corp (國巨).
Hon Hai is also targeting electric vehicles (EV) to diversify its business beyond making products for Apple, which accounts for about 50 percent of its revenue.
Although only a small part of the company’s revenue, automotive component sales are to break NT$10 billion this year, representing 40 percent year-on-year growth, Liu said.
“We anticipate more announcements of joint projects in the second half of 2021 in the electric vehicle space,” Liu said. “The revenue growth is going to be even greater in 2022.”
Hon Hai plans to roll out its first electric bus next year, he said, adding that the first Hon Hai electric sedan is to begin production in 2023.
“We predict EV to reach a market penetration of 20 percent, meaning an addressable market in the range of US$600 billion,” Liu said. “With our current EV strategy, we think we can capture five percent of that market share.”
Globally, Hon Hai said it plans to establish EV plants in Thailand and the US.
The US plant would produce 150,000 vehicles per year in 2023, ramping up to 300,000 to 500,000 vehicles per year, it said.
There are “several thousand” Hon Hai employees just working in the EV division, the company said.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in