Pegatron Reinforces Manufacturing Integrations Via Reinvestments

Taipei, Aug. 30, 2010 (CENS)--Spending around US$220 million to reinvest in a Chinese PC peripheral maker and a precision mold producer, the Taiwan-based Pegatron Corp., an EMS (electronic manufacturing service) firm, has shown its ambition to integrate its in-house production to compete against its Taiwanese counterpart, or the world’s largest EMS provider, Hon Hai Group, according to industry sources.

Charles Lin, Pegatron’s CFO, said that his firm carries out the reinvestments in an effort to reinforce its capability of producing metal parts and molds for IT-based products. The reinvestments, seen as a milestone of the firm’s history, will help to sharpen its competitiveness to catch up with Hon Hai Group in the line.

In addition to the two aforementioned companies, the firm has also reinvested in a couple of firms, including Asrock Inc., a motherboard manufacturer, Kinsus Interconnect Technology Corp., a BGA (ball-grid-array) substrate foundry, Ability Enterprise Co., a digital camera maker, and Shenzhen Kaidaxing Plastic Injection & Mold Company., a plastic parts maker, across Taiwan and China to strengthen integration of related parts manufacturing.

The efforts have paid off, as the firm has snapped up contract orders from Apple for iPhone recently, effectively breaking the status quo of Hon Hai Group’s monopolistic position in Apple’s supply chain of the hot-seller. Also, the firm, who used to supply iPod to Apple, has reportedly planned to vie for the client’s orders for iPad and iTV, emerging as Hon Hai Group’s biggest rival in the competition.

With expanded business activities, the firm reported sales revenue ofNT$160.1 billion, and net profits of NT$3.47 for the first half of this year, adding to its combined revenue of NT$258.5 billion and net profits of NT$5.79 billion, respectively. Hopefully, the firm will post combined revenue of NT$500 billion and EPS of NT$3-3.3 for entire the year, according to institutional investors.