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, strong operating efficiency backed by the company's unrivalled vertically integrated production model, enormous economies of scale, and modest debt leverage. Nevertheless, significant business risks associated with the global contract EMS industry and continuing pressures on the company's profitability partly offset these strengths. We assess Hon Hai's business risk profile as "strong" and financial risk profile as "modest". 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 players in a wide range of
