Hon Hai to acquire renowned international handset maker

Taipei, Oct. 2, 2003 (CENS)--Hon Hai Precision Industrial Co., Taiwan's largest private manufacturer, is reportedly intending to acquire a manufacturing plant owned by an internationally-renowned cell phone maker.

Once the acquisition is realized, Hon Hai will naturally obtain that firm's orders of eight million cell phones. In this way, the acquisition will contribute an additional NT$30 billion (US$887.57 million at US$1:NT$33.8) to Hon Hai's annual sales revenue next year. If the deal is completed, Hon Hai's cell phone division will challenge the revenue target of NT$100 billion (US$2.95 billion) for 2004.

Hon Hai's acquisition move is expected to reshuffle the domestic cell phone contract production realm. At present Taiwan's top-four cell phone makers are BenQ Corp., Arima Communications Corp., Compal Communication Inc., and Quanta Computer Inc. Of them, BenQ estimated it would ship 16 million handsets this year.

Hon Hai, however, has denied the press reports, saying it is evaluating and seeking appropriate firms for acquisition. Recently, the company just offered 67 million euro to acquire more than 90% stake of Eimo Oyj, a satellite manufacturer of Finland's Nokia Corp.

Hon Hai has located its production center of wireless communication products in Beijing, capital of mainland China. To grab orders from the European market, the company set up a new plant in Hungary with an initial investment of US$44 million in June this year. The new plant is launched to supply related parts and components to Nokia.

In July Hon Hai just announced plans to invest US$11.75 million in a technology firm located in Hangzhou, Zhejiang Province for the development of communication connectors, cell phone cases, and printed circuit boards for cell phones. The company aims to develop Hangzhou as its production center of PHS (personal handyphone system) handsets.

Terry T.M. Guo, chairman of Hon Hai, estimated his company would see annual sales turnover reach US$30 billion or break the NT$1 trillion mark when he retires five years later. The company projected to have sales turnover of NT$350 billion (US$10.35 billion) this year, NT$100 billion (US$2.95 billion) more than last year's level.