Taiwan-based Hon Hai is a global provider of PC components and electronic manufacturing services (EMS) for original equipment manufacturers. The rating on the company reflects its strong cost competitiveness, consistent record of solid operating performance, satisfactory financial profile, and the favorable industry trend toward outsourcing. However, these factors are moderated by Hon Hai's high degree of customer concentration, exposure to rapid product cycles in volatile end markets, and challenges associated with managing rapid growth as well as ongoing pricing pressure in the highly competitive EMS industry. Hon Hai's sales increased 68% to US$2.8 billion for fiscal year ended Dec. 31, 2000, and are expected to grow by 45% to more than US$4 billion in 2001 despite a drop in demand
