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 would extend into the rest of the year, Hon Hai said.
Hon Hai chairman Young Liu (劉揚偉) said that the company expects AI server revenue to swell to about NT$1 trillion (US$30.35 billion), following annual growth of 150 percent last year.
Photo: Chiang Ying-ying, AP
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.
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.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS