Hon Hai focused on 5G patents, 6G chip research: chairman

11/26/2020 03:34 PM
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Hon Hai Precision Industry Co. Chairman Liu Young-way. CNA file photo
Hon Hai Precision Industry Co. Chairman Liu Young-way. CNA file photo

Taipei, Nov. 26 (CNA) Hon Hai Precision Industry Co., a Taiwan-based electronics manufacturing giant, has been focused on securing critical standard 5G patents to boost its competitiveness in that field, according to its chairman Liu Young-way (劉揚偉).

At a smart industry development forum Wednesday, Yang said Hon Hai has also started research and development of 6G chips so that it could be ahead of the game in emerging technologies.

Hon Hai, the world's largest contract chipmaker, has secured 1,465 standard 5G patents so far, making it the ninth largest standard 5G patent holder in the world.

Also known as Foxconn in the global market, the company envisions that 5G technologies will not only change people's way of life but also create tremendous business opportunities in the electronics sector, Liu said.

Since 2018, 5G technologies have been meeting the need for new communications applications in a growing global population, he said.

With the introduction of new technologies, however, the global supply chain is becoming increasingly complicated, Liu said.

Against that backdrop, Hon Hai is working to expand its product portfolio with software, processors and computing devices for the new communications technologies, he said.

The company's new 5G technologies will include a wide range of applications such as automotive electronics and smart production, Liu said.

In addition, he said, Hon Hai and its telecom service subsidiary Asia Pacific Telecom Co. are teaming up with Far EasTone Telecommunications Co. to develop new communications technology, including 6G applications and quantum computing.

Quantum computing is expected to improve 5G base stations, while 6G chips are seen as vital to future communications, according to Liu.

On the question of Taiwan's exclusion from the recently signed Regional Comprehensive Economic Partnership (RCEP), Liu said it is unlikely to affect his company's business.

Hon Hai has long been mapping out development strategies to extend its reach in the Asia-Pacific, and since the RCEP is a regional agreement, it is in line with the company's vision, he said.

Commenting on Hon Hai's share price, Liu said that in light of the company's bottom line and promising future, the stock has been undervalued, which is unfair to its shareholders.

In recent years, Hon Hai has been working to expand from only hardware manufacturing into software development to boost its profitability, he said.

In the initial phase of diversification, Hon Hai's gross margin -- the difference between revenue and cost of goods sold -- is expected to increase by 1 percentage point to 7 percent, and when the upgrade is completed, the company's gross margin will likely rise to 10 percent by 2025, according to Liu.

On Thursday, Hon Hai shares rose 1.22 percent to NT$83.00 (US$2.91) on the Taiwan Stock Exchange, where the benchmark weighted index ended up 0.78 percent at 13,845.66.

Since the beginning of the year, Hon Hai stock has dropped about 8.6 percent, while the broader market has gained about 15 percent.

(By Chung Jung-feng and Frances Huang)


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