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Thanks in large part to growth from its customer Apple Inc, EMS (electronics manufacturing services) provider Foxconn Technology Group is set to take more than half of global EMS industry revenue by 2011, up from 44.2% in 2009, according to a recent report from iSuppli Corp.

"Foxconn's customers are some of the hottest companies in the electronics business today, most notably Apple Inc," said Thomas Dinges, iSuppli associate, in a statement. "As Apple and others have gained share, so has Foxconn."

ISuppli defines EMS providers as companies that primary have business in the contract manufacturing of electronic products on behalf of OEMs.

With revenue of $17.1 billion, Taiwan's Foxconn, also known as Hon Hai Precision Industries Ltd, was the dominant EMS provider in Q1. Foxconn's revenue was significantly higher than No. 2 player Flextronics International Ltd, which posted revenue of $5.9 billion in Q1. Foxconn's revenue in the quarter was up 54.1% from $11.1 billion during Q1 2009.

ISuppli said that part of Foxconn's revenue boom is due to the industry wide strength of the digital consumer business and a strong recovery in computing-related products. ISuppli further said the company dramatically outperformed the 27.5% year-over-year revenue increase for the Top 10 EMS providers in Q1, reflecting the strength of its customer base.

ISuppli reported that Foxconn revenue increased by 3.4% last year, while the overall EMS industry contracted by 11.9%. As such, Foxconn was the only Top 10 EMS provider to achieve annual growth in 2009.

A good part of Foxconn's recent success can be attributed to Apple, the EMS providers fastest growing customer. Apple's popular devices, including iPad and iPhone, continue to fly off shelves, propelling its business growth. ISuppli recently reported that Apple's semiconductor spending is expected to increase more than 54% in 2010, a trend that will continue and is expected to make Apple the world's second-largest OEM semiconductor buyer in 2011 and could potentially position the company to become the world's top chip purchaser in 2012. Apple purchases some of its semiconductors through Foxconn, iSuppli noted.

According to iSuppli estimates, Apple is expected to ship 12.9 million iPads in 2010, an amount that will nearly triple to reach 36.5 million in 2011. Apple iPhone shipments are expected to rise to 53.5 million in 2011, more than double the 25.1 million in 2009, iSuppli projected.

By: DocMemory
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