Apple supplier Hon Hai sees revenue take off this year

Hon Hai Precision Industry, Apple Inc's biggest manufacturing partner, said on Wednesday it expects revenue to be much higher this year than the TWD 2.9 trillion (USD 101 billion) of a year earlier.

Hon Hai Chairman Terry Gou also told the annual shareholders meeting that investments in new plants in China and moving existing plants to other areas of China will give a boost to profits in 2012.
"This is a year for solidifying our base; next year will definitely be a harvest year," Gou said.
When asked by shareholders why Hon Hai, flagship unit of the Foxconn group, does not make as much profit as Apple, Guo said the two have been partners for 30 years and Hon Hai is looking for long term yield through improving efficiency and productivity.
"Hon Hai and Apple are not in a supply chain relationship; we are in a strategic relationship," Guo said.
"The yield (Hon Hai gets) on Apple's products is lower than 5% now. We are boosting the yield to increase revenue. We expect to see results in the second half of this year and into next year."
Hon Hai reported a 20% fall in first quarter unconsolidated net profit, blaming seasonal effects.
Its affiliate, Foxconn International Holdings Ltd, the world's top contract cellphone maker, said last month it expects a "dramatic improvement" in its 2011 results, helped by demand for smartphones.
The Foxconn group made headlines last year after reports emerged about poor working conditions at factories in southern China, which critics say may have helped drive several employees to suicide.
Earlier this month an explosion at a Foxconn group plant in Chengdu, western China, killed three people.
Guo also told Wednesday's meeting Hon Hai is considering becoming a holding company to give it flexibility and to sustain high growth.
Shareholders at approved raising the total dividend by TWD 0.5 to TWD 2 per share, and also okayed a plan to sell up to 1 billion new shares.
(USD 1 = 28.670 Taiwan Dollars)