TAIPEI -- Hon Hai will spin  off its connector business into a separate entity come July, according to a Reuters report.

Hon Hai, better known as Foxconn, is the world's fourth largest connector manufacturer with sales of $2.68 billion.

Citing two sources familiar with the situation, Reuters said the decision is based on  margin-pressure in the  PC sector, which has experienced two straight years of softening sales.

The unit eked out a profit in 2012, and is forecast to finish in the black this year, a source told Reuters. Major clients include Apple, Intel, Nokia, Sony and Motorola Mobility.

The company is not commenting.

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