Hon Hai reports record sales for 2021

Hon Hai Precision Industry Co., the world's largest contract electronics maker, reported record-high sales for 2021 Wednesday, representing an over 10 percent year-over-year increase, on the back of a strong showing for consumer smart devices.

In a statement, Hon Hai, also known as Foxconn on the global market, said it posted about NT$5.94 trillion (US$215 billion) in consolidated sales in 2021, representing a better than expected increase of 10.86 percent from a year earlier.

In 2021, its consumer smart division had the strongest performance in terms of revenue growth, ahead of the electronics component division, while revenue generated by its computer and cloud-based connectivity division stayed little changed from a year earlier, Hon Hai said.

As the world's largest supplier of devices and components for data centers, Hon Hai said it had benefited from booming business opportunities from cloud services, and the so-called "metaverse" concept, which has been talked up by Facebook founder Mark Zuckerberg since July 2021.

As a result, Hon Hai said it had generated almost NT$1 trillion in revenue from server shipments in 2021.

On Tuesday, Ennoconn Corp., an industrial computer subsidiary of Hon Hai, announced that American tech giant Google Inc. would become its third-largest institutional shareholder after agreeing to acquire a 4.6 percent stake.

Google's stake comes at a time when the global tech sector has set its sights on opportunities from the metaverse concept.

Ennoconn, a supplier of servers and components used in 5G applications and data centers, has been perceived as a "metaverse concept stock."

Hon Hai currently owns a 32.98 percent stake in Ennoconn through Bao Shin International Investment Co. and is the subsidiary's largest institutional shareholder.

In addition, Foxconn Industrial Internet Co., a Shanghai-listed subsidiary of Hon Hai specializing in internet-connected industrial solutions, is also pursuing metaverse business opportunities and has gotten involved by shipping graphics processing units (GPU) to the global market.

In December alone, Hon Hai posted NT$660.68 billion in consolidated sales, up 6.27 percent from a month earlier but down 7.44 percent from a year earlier.

Hon Hai said the increase in sales for December was driven in part by solid demand for devices used in data centers and consumer electronics devices.

The firms also said that improvement in global raw material supplies gave a boost to shipments.

In the fourth quarter of last year, Hon Hai posted NT$NT$1.83 trillion in consolidated sales, up 30.6 percent from a quarter earlier. The fourth quarter's figure beat an earlier market estimate of NT$1.79 trillion.

Analysts said the strong fourth quarter was driven largely by solid demand for smartphones in the iPhone 13 series, which made their debut on the global market in September 2021.

Hon Hai is believed to be the sole manufacturer of the two larger iPhone 13 models -- the iPhone 13 Pro and iPhone 13 Pro Max -- and is also thought to have fielded 65-70 percent of assembly orders for the entire series.

International news media cited Wedbush analyst Daniel Ives as saying that the momentum of the iPhone sales worldwide was expected to continue into the first quarter of this year.

Source: Focus Taiwan News Channel