Hon Hai unit invests in Vietnam, eyes key component expansion

Taipei, July 3 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. has invested U$119.6 million in Vietnam through its subsidiary in the Southeast Asian country with market analysts noting the investment was part of the company's expansion of its production of critical electronics components.

In a statement on the Taiwan Stock Exchange, where Hon Hai shares are traded, the company said it invested US$119.6 million or about NT$3.9 billion through its Vietnamese unit Fulian Precision Technology Component Co. to rent a parcel of land and build new facilities.

While Hon Hai, also known as Foxconn on the global markets, said the funds would be used for operational purposes without elaborating, industrial sources with knowledge of the matter said the investment is also expected to expand the production of parts for key electronics.

According to its annual report, Hon Hai said Fulian Precision Technology, founded in January 2023, is located in the Quang Chau industrial park in Bac Giang province, northeastern Vietnam.

The subsidiary, with a paid-in capital of US$200 million, rolls out electronics products and components including motherboards, servers, network adapters, communications devices, and set-top boxes, the annual report showed.

Before the US$119.6 million investment, Hon Hai announced in February 2023 that Fulian Precision Technology invested about NT$1.9 billion in the Quang Chau industrial park to expand production.

Hon Hai announced in September 2021 that it invested US$80 million in the Quang Chau industrial park to expand its notebook computer and tablet computer production. Market analysts said the investment was to roll out products for Apple Inc.

In addition to the Quang Chau Industrial Park, Hon Hai also runs facilities in the Dinh Tram Industrial Park in Bac Giang.

Apple accounts for about 40 percent of Hon Hai's total sales a year as the Taiwanese company is the most important assembler of high-end iPhones, including the latest iPhone 15 Pro and iPhone 15 Pro Max, which command a higher profit margin.

In recent years, Hon Hai has intensified its efforts in pushing the "3 plus 3" initiative forward in a bid to broaden its product portfolio and transform it from a pure contract manufacturer into a company able to combine its hardware and software strength.

The initiative refers to three emerging industries -- electric vehicles, robots, and digital health care -- the company is developing via artificial intelligence, semiconductor, and communications technologies with EVs as the core business, according to Hon Hai.