Hon Hai Precision Industry Co’s (鴻海精密) second-quarter sales outperformed analysts’ rising expectations on the strength of the company’s growing artificial-intelligence (AI) server business.
The iPhone assembler, also known as Foxconn (富士康), yesterday said that its revenue last month was NT$490.7 billion (US$15.1 billion), making for a total of NT$1.55 trillion for the quarter, up 19 percent. An average of analyst estimates pointed to a 13.8 percent rise, with expectations growing after Hon Hai said a month earlier that it expected the AI business to help it beat estimates for the quarter.
Hon Hai said revenue last quarter marked the strongest second quarter performance in the company’s history and greatly exceeded its own expectations.
Photo: Ann Wang, Reuters
Hon Hai’s shares have more than doubled this year and hit new highs last month on hopes the company can capitalize on the AI boom. It went through a tough year last year, as sales shrank due to moribund demand for the consumer electronics it assembles. However, the company rapidly added revenue from orders for AI servers and other data center gear, diversifying away from the smartphone business.
“The third quarter is expected to generate growth compared to the second quarter and the same period last year,” Hon Hai said in a statement accompanying its monthly sales release.
Excitement about Hon Hai’s role in the AI hardware market helped its shares breach the NT$200 level that founder Terry Gou (郭台銘) had pledged to achieve in 2016. The AI boom has also brought much focus to Taiwan this year, making the latest Computex event a huge success, with CEOs from the biggest US chipmakers all coming to woo key suppliers and data center equipment makers.
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
REGIONAL COMPETITION: Over the past few years the Philippines has lost ground to neighbors such as Vietnam, Indonesia and Malaysia, a Philippine official said The Philippines is trying to enlist Taiwanese chip giants to expand in semiconductors, a bid to catch up with its neighbors who are emerging as significant suppliers in the industry. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) are among companies the Philippines is reaching out to as it seeks equipment and expertise to build out chip fabrication operations, said Dan Lachica, head of the Southeast Asian country’s main electronics industry group, the Semiconductor and Electronics Industries in the Philippines Foundation Inc (SEIPI). The association is working with Philippine officials in Taiwan to talk with potential
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification. President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004. The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007. City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98