Known by its trade name Foxconn, Hon Hai Precision Industry Co. (2317) is famous for being the world’s largest contract manufacturer of electronics. According to recent news, Hon Hai’s profit climbed to a record $3.2 billion in net income.
The profit that the manufacturing company saw was attributed to Apple’s launch of the iPhone 5 and the three different iPad models that were released in 2012: third- and fourth-generation iPads, and the iPad mini. Furthermore, Hon Hai benefited from Apple’s decision to broaden its product line up and record opening-weekend sales of the iPhone, its top-selling product.
Bloomberg speculated that Foxconn’s increased profitability may suggest that the supplier has been able to negotiate higher prices for components and assembly.
According to the report posted by Hon Hai Precision Industry Co., net income climbed to (New Taiwan Dollar) NT$94.8 billion ($3.2 billion US) in 2012 the Taipei-based company said in an exchange statement today. Revenue climbed to a record NT$3.9 trillion.
In addition to the records announced by Foxconn, Apple also had a record year in 2012, gaining more than $40 billion in fiscal profits. This profit made Apple the only tech company to ever reach that benchmark. Altogether, this is a feat only ever matched by oil giant Exxon Mobil.
On occasion, Apple partners with other assembly companies such as Pegatron, but lately, Foxconn was the one that has managed the lion’s share of the company’s assembly duties. Therefore, Hon Hai is the company in charge with the assembly of a majority of Apple’s products.
Together with the news regarding the incredible profit, came another announcement from Hon Hai. Earlier this month, the company stated that they are planning to add 5,000 new jobs, marking the most ample hiring surge of its kind for the company in recent years. It has been asserted that the company prepares to be hiring largely research and development personnel.
However, Apple has been criticized because of the partnership with this manufacturing company. The problem that appeared was strictly connected to the extremely low wages and the notably unsafe work conditions that have been observed at Chinese manufacturing plants.
In response to the accusations, Apple has received the company began making pressure on Foxconn, in order to make the working conditions safer for the employees. It seemed that Apple’s pressures were not in vain as Foxconn promised to implement a number of “wide-ranging reforms”. The manufacturing company’s plans included reducing workers’ hours and significantly boosting wages.