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 view, Hon Hai's strong market position as the world's largest EMS provider strongly supports the rating on the company. Hon Hai has established a strong customer base consisting of major global
