Strong market position Strong operating efficiency backed by the company's unrivalled vertically integrated production model Prudent financial policy with modest debt leverage Heightening industry risks Persistent margin pressure Increasing customer concentration The rating on Taiwan-based Hon Hai Precision Industry Co. Ltd. reflects the company's strong market position in the global electronics manufacturing services (EMS) industry, strong operating efficiency backed by the company's unrivalled vertically integrated production model, and modest debt leverage. Nevertheless, significant business risks associated with the global contract EMS industry, continuing margin pressures on the company's profitability, and the company's increasing customer concentration partly offset these strengths. We assess Hon Hai's business risk profile as "Strong" and financial risk profile as "Modest", compared with obligors worldwide. In our
