Image from Pixabay for illustrative purposes
Taipei, April 7 (CNA) Hon Hai Precision Industry Co., the world's largest contract electronics maker, has reported its highest sales ever for a first quarter after a strong showing in March.
Analysts said the company's sales milestone reflected solid global demand for the larger Apple iPhone 12 models that are being assembled by Hon Hai, also known as Foxconn internationally.
In a statement Tuesday, Hon Hai reported first quarter consolidated sales of NT$1.34 trillion (US$47.02 billion), up 44.49 percent from a year earlier. It beat Hon Hai's previous estimate of a roughly 15 percent year-on-year increase in the first quarter.
In March alone, Hon Hai had consolidated sales of NT$441.22 billion, up 26.91 percent from a year earlier and up 9.78 percent from a month earlier, the company's figures showed.
Hon Hai's consumer electronics division recorded the highest shipment growth in March 2021 compared to March 2020, followed by the computer and related device division, the cloud technology-based device division, and the electronics component division, Hon Hai said.
Apple Inc. unveiled the latest four iPhone models -- the 5.4-inch iPhone 12 mini, 6.1-inch iPhone 12, 6.1-inch iPhone 12 Pro, and 6.7 inch iPhone 12 Pro Max -- last year.
They were the first iPhone models to support 5G communications, which sparked strong replacement demand worldwide, analysts said.
As Hon Hai is the sole assembler of the larger iPhone 12 Pro and iPhone 12 Pro Max, which have been well received by the market, the benefits were clear in the first quarter, analysts said.
According to market estimates, Apple accounts for about 40 percent of Hon Hai's total sales.
For the first quarter, Hon Hai said its consumer electronics division also reported the highest growth on a year-on-year basis, ahead of the computer and related device division, the electronics component division, and the cloud technology-based device division.
The company said it has now set its sights on boosting its gross margin -- the difference between revenue and cost of goods sold -- to 7 percent for all of 2021 as it continues its transformation into a company able to integrate its hardware and software capabilities.
Hon Hai's gross margin was 5.69 percent in the fourth quarter of 2020.
Hon Hai has been promoting a "3 plus 3" initiative to expand from its contract manufacturing business into hardware and software integration. The development of electric cars is central to that initiative as is building an electric car supply chain.
The "3 plus 3" initiative refers to three emerging industries -- electric cars, robots and digital healthcare -- that are being developed through the application of artificial intelligence, semiconductor and communication technologies.
Hon Hai has said its efforts in electric car development aims to lift its gross margin to 10 percent in 2025.
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