Foxconn International Holdings will spend $1bn to at least double capacity by 2008, and denied on Tuesday it is making iPhones for Apple Computer.
HONG KONG: Foxconn International Holdings, an arm of Taiwan's Hon Hai Precision Industry, will spend $1 billion to at least double capacity by 2008, and denied on Tuesday it is making iPhones for Apple Computer.
Chief Executive Samuel Chin poured cold water over speculation that Foxconn -- now primarily a maker of cellphones for Nokia and Motorola -- had become the main supplier of the hotly anticipated device, news of which had helped prop up its stock.
Instead, the fast-growing company intends to focus on cellphone manufacturing in coming years, while trying to broaden its customer base.
Samsung -- now a tiny client relative to Nokia and Motorola -- should account for at least 10 per cent of revenue this year, Chin added.
Now, the firm wants to build new plants in China's Taiyuan and India, on top of a $1.2 billion factory going up in the Chinese 'silicon valley' of Langfang and existing sites in Beijing and Shenzhen, with completion set for 2008.
"We currently have capacity that made $10 billion revenue in 2006. I'm trying to increase capacity so that in year 2008 and 2009 we'll be able to generate at least $20 billion revenue," Chin told reporters at a shareholders' meeting in Hong Kong.
"We've outgrown Shenzhen and Beijing. There's not enough capacity to fit our requirements, the costs in these areas have increased. We've no choice but to find more cost-competitive sites."
To further drive growth, Foxconn is in discussions with potential buyout targets and hopes to complete one to two acquisitions this year, though executives would not elaborate.
Shares in Foxconn -- a constituent of Hong Kong's blue-chip Hang Seng Index -- ended Tuesday down 1.4 per cent, lagging the market's tepid gain.
Taiwan's top electronics maker Hon Hai, which makes computer parts and MP3 players for the likes of Apple, Dell and Hewlett-Packard, started pushing Foxconn as its computer components brand in 2004.
But Hong Kong-listed Foxconn International -- which derives an estimated four-fifths of its business from Nokia and Motorola -- is a separate cellphone-making entity that has seen both earnings and revenue surge several-fold in past years as it rode a global outsourcing trend.
The Wall Street Journal reported in January that Foxconn would become the main supplier of Apple's telephone and media player, sending its shares 5 per cent higher on Jan. 11.
Analysts say parent Hon Hai has the stronger relationship with Apple and would be a natural supplier of the iPhone, the much-touted device set to hit stores this month.
Chin did not elaborate apart from saying "Foxconn is not producing iPhones for Apple". He would not be drawn on whether the Taiwanese firm had earned the contract.
Separately, Foxconn said in a statement it will sue battery-maker BYD -- which is making forays into cellphone manufacturing -- over the defection of several key executives, claiming breach of contract.
Chin dismissed potential competition on Tuesday from BYD, but declined to comment further. BYD executives did not return calls for comment on Tuesday.
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