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Electronics Production | June 08, 2007

Foxconn is the reason FLEX/SLR merged

Even as electronics manufacturers have stumbled in recent years, one company, Taiwan's Hon Hai Precision Industry Co., or more well known as Foxconn, has blown past the competition to become the top player in the industry.

Hon Hai "is the key reason Flextronics and Solectron merged," says Byron Wu, China research manager for electronics market watcher iSuppli Corp in an interview with Business Week. Hon Hai's sales jumped 44% in 2006, to $40 billion, which is more than the combined revenues of its three nearest rivals, Flextronics, Solectron, and Jabil Circuit. Profits for Hon Hai climbed 47%, to $1.8 billion, for the year. And its stock has been up 52% in the past 12 months. According to Business Week the reason why Hon Hai is getting better along than its rivals is that it makes about one-third of its own components, everything from printed circuit boards and connectors to the casings for iPods. According to Macquarie Securities Ltd. that helps boost Hon Hai to better keep cost control and cut more profitable deals. The comparable figure for competitors is under 10 percent. Read the full article on Business Week.
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