The rating on Taiwan-based Hon Hai Precision Industry Co. Ltd. reflects the company's strong competitive position in the global electronics manufacturing services (EMS) industry, low cost, unrivalled vertically integrated production model, and modest debt usage. Nevertheless, the company's business risks associated with the global contract EMS industry and continuing margin pressures partly offset these strengths. In our view, Hon Hai's leading 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 players in a wide range of electronics products, which partly offsets the company's customer concentration risk. Market share gains in fast-growing liquid crystal display TV, smart phone, and tablet PC markets helped
