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

(Bloomberg) -- IPhone assembler Hon Hai Precision Industry Co.’s first-quarter revenue jumped 44% on robust demand for Apple Inc.’s new 5G devices and other gadgets that help consumers stay connected at home during the pandemic.

Revenue in the three months through March rose to NT$1.34 trillion ($47 billion), the Taiwanese manufacturer reported Tuesday, in line with the average analyst estimate. Sales in March climbed to NT$441.2 billion. The stock jumped as much as 1.6% in Taipei on Wednesday.

The strong showing from the world’s largest contract electronics maker suggests demand for iPhones, gaming consoles and servers remains robust as consumers snatch up devices for remote work, home-schooling and entertainment needs. Companies are also spending on technology, expanding data-center infrastructure to better serve customers’ online activities.

However, Hon Hai warned in late March that component shortages could persist until 2022 and affect under a tenth of its shipments, amplifying concerns that a global chip crunch could extend well beyond this year.

Shares of Hon Hai gained 60% over the past six months as the company announced its ambitions to venture into the electric-vehicle business, inking manufacturing deals with partners such as Byton Ltd. and Fisker Inc.

Annual shipments of Hon Hai’s EVs may reach 1.1 million units, or around 10% of global share, by 2025, Morgan Stanley estimated in March. Its auto businesses could generate $35 billion in revenue by that year, according to analysts including Sharon Shih.

(Adds shares in second paragraph)

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