Hon Hai Precision Industry Co (鴻海精密) yesterday predicted flattish revenue for this year, as major central banks’ monetary tightening could affect consumer spending on electronic devices.
The iPhone assembler’s cautious guidance came after it reported its best earnings in about 15 years, with net profit last year expanding 2 percent to NT$141.48 billion (US$4.62 billion) from NT$139.32 billion in 2021. Earnings per share rose to NT$10.21 from NT$10.05 the previous year.
Last year’s revenue expanded 11 percent to a record NT$6.63 trillion, but gross margin was unchanged at 6.04 percent after fourth-quarter margin slid to 5.66 percent from 6.03 percent a year earlier due to increases in COVID-19-related spending and lower utilization at its Zhengzhou factory in China, it said.
Photo: Annabelle Chih, Reuters
The company still aims to meet its gross margin target of 10 percent for 2025, it added.
“As we mentioned during the last conference, we have a neutral view of the outlook for the information and communications technology industry in 2023. The high-speed growth period induced by the COVID-19 pandemic has ended,” Hon Hai chairman Young Liu (劉揚偉) told investors at an online conference.
With macroeconomic conditions worsening, the company is “relatively conservative” about order visibility, Liu said.
Revenue this year would be flat from last year, he said.
The smartphone segment is likely to be the only product line that would see a mild decline this year, given a higher base last year, Liu said.
However, the company expects robust growth for cloud-based servers this year, benefiting from the rise of ChatGPT, which requires high-performance servers to collect and analyze data, Liu said.
Hon Hai last year doubled its shipments of artificial intelligence servers, which contributed 20 percent to its annual server revenue, he added.
The company also expects to see significant growth in shipments of computer products and components, thanks to market share gains and increasing orders, Liu said.
For this quarter, revenue would contract on a quarterly basis due to a seasonal slowdown, but the decline would be smaller than usual, as the company’s Zhengzhou factory, its biggest smartphone center, has resumed normal operations, he said.
Hon Hai is also stepping up its electric vehicle (EV) deployment this year in North America amid expectations of growth in electric vehicles and automotive components, the company said.
The company is to ramp up EV production at its Ohio factory as it aims to ship its first batch of e-sports utility vehicle Model Cs this year, it added.
Automotive components are forecast to generate between NT$50 billion and NT$100 billion in revenue this year, up from NT$20 billion last year, as Hon Hai is adding battery packs and other components to its product lineup, Liu said.
The company reiterated its target of generating NT$1 trillion from its EV business in 2050.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
RSS