Hon Hai Precision Industry Co (鴻海精密), the main supplier of Nvidia Corp artificial intelligence (AI) servers, posted a 3.16 percent year-on-year rise in sales last month and strengthened its first-quarter outlook.
Hon Hai, also known as Foxconn Technology Group (富士康科技集團), the world’s largest assembler of Apple Inc iPhones, reported revenue of NT$538.67 billion (US$16.4 billion) last month. The comparison with last year was skewed by the fact that this year the week-long Lunar New Year holiday fell last month, versus February last year.
On a monthly basis, revenue fell 17.74 percent as the Lunar New Year holiday reduced the number of working days.
Photo: Ritchie B. Tongo, EPA-EFE
As Nvidia’s most important AI server maker, Hon Hai’s performance is a bellwether for the AI infrastructure build-out.
The company said first-quarter sequential growth, or the increase from the December quarter, would be “better than the average level” of the past five years.
That is a rosier projection than the “roughly similar levels” the company teased last month. Growth on a year-over-year basis would be strong, a better outlook as well than that stated before.
Hon Hai, which ships electronics to the rest of the world from giant production bases in China, is grappling this year with uncertainty surrounding US President Donald Trump administration’s tariffs and the sustainability of the AI boom.
While big tech firms from Microsoft Corp to Amazon.com Inc this month pledged to continue spending to keep pace with a revolutionary technology, Chinese start-up DeepSeek’s (深度求索) rise has spurred doubts about whether all that infrastructure expenditure is justified.
“Hon Hai’s future growth is increasingly tied to AI servers — a segment in which it competes with other original design manufacturers such as Quanta Computer Inc (廣達), Inventec Corp (英業達) and Wistron Corp (緯創),” Bloomberg Intelligence analysts Steven Tseng (曾緒良) and Sean Chen said in a note.
“Hon Hai’s sales growth aligns with electronics manufacturing peers, with robust growth in the cloud segment offset by slower consumer electronics. Its profitability and valuation are both below peer average, dragged lower by iPhone assembly operations,” Chen said.
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