Gadget, phone demand boosts Hon Hai, Largan

Hon Hai Precision Industry Co (鴻海精密), an iPhone assembler, has benefited from solid demand for Apple Inc’s latest smartphones and other gadgets such as high-end servers, reporting a monthly sales increase of more than 4 percent last month.

Largan Precision Co (大立光), a supplier of Apple’s smartphone camera lenses, also saw a jump in its sales last month, which rose 13 percent month-on-month.

Hon Hai, the world’s largest contract electronics maker, said in a statement on Thursday that it posted NT$418.02 billion (US$15.03 billion) in consolidated sales last month, up 4.08 percent month-on-month and 3.64 percent year-on-year.

The company’s sales were driven by solid demand for Apple’s iPhone 12 Pro and Pro Max, as well as for servers, notebook computers and equipment for 5G base stations, analysts said.

The strong sales indicated that Hon Hai’s operations in the Chinese city of Zhengzhou were not affected by severe flooding that began on July 16, analysts said.

The Zhengzhou plant, Hon Hai’s second-largest factory in China, employs 250,000 people who assemble 500,000 iPhones per day, accounting for about 50 percent of global iPhone production, Chinese media reported.

Among Hon Hai’s various divisions, its consumer electronics business posted the best year-on-year sales growth last month, followed by electronic components, computer products and cloud technology-based gadgets, the company said.

On a monthly basis, the electronic components division reported the highest sales growth, ahead of computer products, cloud technology-based gadgets and consumer electronics, Hon Hai said.

Hon Hai’s consolidated sales in the first seven months of the year totaled NT$3.12 trillion, up 26.69 percent from a year earlier.

Largan on Thursday said that its consolidated sales last month rose by 13 percent month-on-month to NT$3.8 billion, marking the second consecutive month of growth.

However, that represented an 18 percent decline from a year earlier, which analysts attributed to a loss of orders from one of its major clients, Huawei Technologies Co (華為), due to sanctions imposed on the Chinese company by the US in September last year.

Largan has forecast a continued monthly increase in sales this month, saying that a shortage of chips has eased to some extent, but a shortage of other raw materials remains.

Lenses of 20 megapixels and more, which have a higher profit margin, accounted for 10 to 20 percent of Largan’s total sales last month, while 10 to 20 megapixel lenses accounted for 40 to 50 percent, and 8 to 10 megapixel lenses comprised 10 percent, Largan said.

Largan’s consolidated sales in the first seven months of the year fell 16 percent year-on-year to NT$25.74 billion.