No. 12: Hon Hai Precision Industry

Current BW Magazine Table of Contents

October 24, 2005 BW Magazine Table of Contents

October 24, 2005 Asia BW 50 Table of Contents

Asia's BW50

2005 Rankings

1	PTT
2	PetroChina
3	Oil and Natural Gas
4	S-Oil
5	Tata Steel
6	POSCO
7	Shinhan Financial Group
8	LG Corp.
9	Samsung Electronics
10	MISC (Malaysia IntÕl. Shipping)
11	Taiwan Semiconductor Mfg.
12	Hon Hai Precision Industry
13	AU Optronics
14	Formosa Chemicals & Fibre
15	Mitsui OSK Lines
16	Reliance Industries
17	CNOOC
18	Tata Motors
19	Hyundai Mobis
20	Komatsu
21	LG Electronics
22	China Petroleum & Chemical
23	Philippine Long Distance Telephone
24	PT BUMI Resources
25	Shell Refining (Federation of Malaya)
26	Sumitomo Metal Industries
27	PT Astra International
28	Thai Petrochemical Industry
29	Kobe Steel
30	Aluminum Corporation of China
31	High Tech Computer
32	Toyota Tsusho
33	Nippon Mining Holdings
34	Formosa Plastics
35	Jilin Chemical Industrial
36	Larsen & Toubro
37	China Steel
38	Esprit Holdings
39	Infosys Technologies
40	LG.Philips LCD
41	China Mobile (Hong Kong)
42	Sinopec Zhenhai Refining & Chemical
43	ICICI Bank
44	Siam Cement Group
45	Sinopec Shanghai Petrochemical
46	Matsui Securities
47	Yamada-Denki
48	Kawasaki Kisen Kaisha
49	Orix
50	Nippon Steel

Data: Standard & Poor's Compustat

OCTOBER 24, 2005

STORY TOOLS

DAVID HARTUNG

Hon Hai Precision Industry Co. is a rags-to-riches story. Founder Terry Gou started the company in 1974 in a Taiwan industrial suburb of Taipei with a $5,000 loan from his family. He initially made plastic parts for TV sets. Now Hon Hai assembles everything from PCs for Hewlett-Packard Co. (HPQ ) to cell phones for Nokia Corp. to PlayStation2 game consoles for Sony Corp (SNE ). And Gou is a billionaire.

His strong work ethic and relentless cost-cutting have turned Hon Hai into a cash machine. Profits for this year are projected to rise 24%, to $1.2 billion. Although margins are under pressure from fierce competition, the company remains ahead of rivals. Just last year Hon Hai surpassed Flextronics International Ltd. (FLEX ) to become the world's No. 1 electronics manufacturing services company.

Gou has consistently been able to undercut competitors' prices as much as 20% by leveraging a cheap, 100,000-plus workforce in China. And his footprint is widening. The company recently bought cell-phone manufacturer Chi Mei Communication Systems Inc. and wireless local-area network equipment maker Ambit Microsystems Corp., whose customers include Motorola Inc. (MOT ) and Intel Corp. (INTC ) If Gou retires as planned in 2008, Hon Hai will have no easy time finding a successor with his management skill and tenacity.

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