Hon Hai Precision Industry Co., the world's largest contract electronics manufacturer, continued to increase its lead over rivals in the second quarter, posting a 30% rise in sales.

The company, which counts Dell and HP among its PC customers, makes iPods for Apple, mobile phones for Nokia and PlayStation game consoles for Sony, reported that its sales rose to NT$184.95 billion (US$5.67 billion as of June 30, the end of the three-month period reported.)

Hon Hai's net profit rose 43%, to NT$12.78 billion.

The company has been embroiled in bad publicity over the alleged mistreatment of workers at an iPod factory run by one of its China subsidiaries. An investigation by Apple found little wrong at the site, but the issue continued to dog the company. The subsidiary, Hong Fujin Precision Industry Co., launched a defamation lawsuit against two Shanghai journalists over a story they wrote in June about the factory conditions.

Hong Fujin exported $14.47 billion worth of IT products from China last year, making it No. 1 in that category, according to China's Ministry of Commerce.

The second biggest electronics manufacturer in the world, Flextronics International, has vowed to regain market share from its rival this year. The Singapore-based company reported revenue of $4.06 billion and a net profit of $85 million for the three months ended June 30, short of Hon Hai on both figures.

The IDG News Service is a Network World affiliate.