The ratings on Hon Hai Precision Industry Co. Ltd. (Hon Hai) reflect the company's strong competitive position, consistently good operating performance, and modest financial profile, which have underpinned consistent sales and profit growth and the successful diversification of its customer base and product range. Counterbalancing factors include extremely competitive industry conditions and a business model that subjects the company to strong customer bargaining power and margin pressure. Hon Hai is one of the world's largest electronics contract manufacturers, with total revenue of Taiwan dollar (NT$) 541 billion in 2004. The company's strong competitive position is underpinned by several key factors, including strong mechanical engineering expertise, a vertically integrated production process, reliable production quality, and global logistics capability. These factors enable
