February. 5, 2002

Hon Hai Precision Industry Co. Ltd of Taiwan, until now known as the major power connector supplier, will make telecom network equipment its priority business after opening a new factory in Beijing. China in March, the company told the press in Taipei. The plant is located at an industrial park, developed by Hon Hai affiliate Foxconn Industrial group with 800,000 square meters of size at a cost of US$ 1 billion.

Hon Hai has had its cellphone cases, boards and assembly processes validated by mobile phone giants Nokio and Motorola. Nokia has placed a large order, which will help the Taiwan company boost assembly output to one million handsets a month from next year on. Hon Hai's mobile phone unit has worked on over 10 projects with Nokia, including the manufacturing of precision plastic parts, laser processing, structure design and validation. The company recently retracted a statement that it would only produce mobile phone parts, saying that it has not rule out the possiblity of assembling complete mobile phones.

Industry insiders in Taipei say that Hon Hai will be well positioned to win additional contract orders from Motorola and Nokia after the mainland factory is fully operational. Hon Hai also hopes to win orders from Sony-Ericsson, as Sony has already contracted the Taiwan company to power cables and other components for the PlayStation 2 game console.

Hon Hai supplied US$100 million worth of network equipment last year, wioth major customers including Cisco Systems, Brocade Communications Systems, and Stretch.
Institutional investors estimate that Hon Hai is likely to report revenues to the equivalent of US$7.14 billion next year, with the Beijing industrial parl contributing US$1.71 billion of the total.

The company unseated Taiwan Semiconductor Manufacturing Co. (TSMC) last year to become Taiwan biggest electronics manufacturer.