Hon Hai Precision Industry Co (鴻海精密) yesterday said artificial intelligence (AI) server revenue this quarter is to more than double from a year ago, driven by demand for AI servers based on Nvidia’s GB200 chip from the world’s major cloud service providers (CSP) and large-scale enterprises.
The growth momentum is expected to extend into the rest of the year, Hon Hai said. This year as a whole, revenue from AI servers would swell to about NT$1 trillion, following an annual growth of 150 percent last year, company chairman Young Liu (劉揚偉) told investors during an online investor conference.
That meant AI server revenue would account for more than 50 percent of the company’s overall server revenue this year, up from 40 percent to 42 percent last year, Liu said.
Photo: Chiang Ying-ying, AP
Servers and networking products would soon become the largest revenue contributor to Hon Hai, replacing smartphones, he said.
“The AI server market is thriving now, thanks to strong demand for GB server racks from the world’s major CSPs and first-tier brand vendors. Those [machines] are adopted particularly for cloud computing and high-performance data centers,” Liu said, citing better order visibility.
Hon Hai is also ramping up production of GB200 servers with an improving yield, Liu said, adding that the growth momentum would be supported by the upcoming production of AI servers equipped with new-generation AI chips, he said.
As a key supplier to Nvidia, Hon Hai aims to seize more than 40 percent of the world’s AI server market, Liu said.
Liu also dismissed rumors about ebbing demand for AI servers from cloud service providers (CSPs).
“There was a rumor saying that CSP demand will peak this year. And then, it will go down after this year. We are not seeing that. We think the demand is still pretty strong,” at least for Hon Hai, Liu said.
Asked about growing competition from servers powered by AI application-specific ICs (ASICs), Liu said: “Most of the training still happens in the cloud side, so most activities on the AI demand is mostly still for AI training.”
Looking at the current quarter, Hon Hai expects revenue to grow significantly on an annual basis, beating the seasonal slowdown the company has seen over the past 5 years, Liu said.
All major product segments are expected to see strong year-on-year growth this quarter, led by servers and networking products, Liu said.
Asked about how to cope with US President Donald Trump’s tariff policy, Liu said Hon Hai is discussing with its customers to build new manufacturing sites in the US.
To fund those new factories, Hon Hai plans to hike its capital expenditures this year by 20 percent from NT$136.3 billion last year. The company said it would discuss with customers to absorb cost increases in order to keep a stable profit margin.
Hon Hai yesterday posted the strongest annual net profit in the company’s history, amounting to NT$152.71 billion, up 7 percent from NT$142.1 billion in 2023. Earnings per share rose to NT$11.01 from NT$10.25, the highest since 2008.
The board of directors yesterday approved a cash dividend distribution of NT$5.8 per common share, the best since the company’s listing in 1991. That represented a payout ratio of 52.7 percent.
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in artificial-intelligence (AI) chips, yesterday said that small-volume production of 3-nanometer (nm) chips for a key customer is on track to start by the end of this year, dismissing speculation about delays in producing advanced chips. As Alchip is transitioning from 7-nanometer and 5-nanometer process technology to 3 nanometers, investors and shareholders have been closely monitoring whether the company is navigating through such transition smoothly. “We are proceeding well in [building] this generation [of chips]. It appears to me that no revision will be required. We have achieved success in designing
RSS