Hon Hai Revenue Jumps 44% on Stay-at-Home Demand for Gadgets

(Bloomberg) — IPhone assembler Hon Hai Precision Trade Co.’s first-quarter income jumped 44% on sturdy demand for Apple Inc.’s new 5G units and different devices that assist shoppers keep linked at residence throughout the pandemic.

Income within the three months by March rose to NT$1.34 trillion ($47 billion), the Taiwanese producer reported Tuesday, in keeping with the typical analyst estimate. Gross sales in March climbed to NT$441.2 billion. The inventory jumped as a lot as 1.6% in Taipei on Wednesday.

The sturdy displaying from the world’s largest contract electronics maker suggests demand for iPhones, gaming consoles and servers stays sturdy as shoppers snatch up units for distant work, home-schooling and leisure wants. Firms are additionally spending on expertise, increasing data-center infrastructure to higher serve clients’ on-line actions.

Nonetheless, Hon Hai warned in late March that element shortages might persist till 2022 and have an effect on beneath a tenth of its shipments, amplifying issues {that a} international chip crunch might lengthen effectively past this yr.

Shares of Hon Hai gained 60% over the previous six months as the corporate introduced its ambitions to enterprise into the electric-vehicle enterprise, inking manufacturing offers with companions comparable to Byton Ltd. and Fisker Inc.

Annual shipments of Hon Hai’s EVs could attain 1.1 million models, or round 10% of worldwide share, by 2025, Morgan Stanley estimated in March. Its auto companies might generate $35 billion in income by that yr, in keeping with analysts together with Sharon Shih.

(Provides shares in second paragraph)

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