Hon Hai Precision Industry Co’s (鴻海精密) annual sales growth slowed last month compared with the previous few months, signaling that tariff-induced uncertainties are affecting electronics demand.
Sales rose 7.25 percent year-on-year to NT$613.87 billion (US$20.5 billion), its slowest growth since January, Hon Hai said in a statement on Tuesday.
Still, last month’s sales were the highest figure for July in the company’s history, Hon Hai said.
Photo: Cheng I-hwa, AFP
Sales in the first seven months of this year totaled NT$4.05 trillion, a 17.62 percent increase from the same period last year and also the highest ever for the period, said the company, also known as Foxconn Technology Group (富士康科技集團).
Analysts were looking for a 12.2 percent increase in third-quarter revenue. Nvidia Corp’s main server assembly partner, Hon Hai, which also assembles Apple Inc’s iPhones, said it expects third-quarter sales to grow sequentially and year-on-year.
However, “the impact of evolving global political and economic conditions, and exchange rate changes, will need continued close monitoring,” Hon Hai said.
Last week, US President Donald Trump set a 20 percent levy on Taiwan’s exports to the US. While electronics are exempt, they might be affected by the outcome of a US investigation under Section 232 of the Trade Expansion Act of 1962, which includes probes into sectors such as semiconductor products.
Still, there might be bright spots for Hon Hai later this year.
The world’s largest tech companies are raising capital spending further this year to keep ahead in an escalating artificial intelligence (AI) race. Microsoft Corp, Amazon.com Inc, Alphabet Inc and Meta Platforms Inc are expected to collectively spend more than US$344 billion this year, with much of the amount devoted to AI data centers.
Nvidia alone has outlined plans to produce as much as half a trillion dollars’ worth of AI infrastructure in the US over the next few years, through manufacturing partners including Hon Hai.
Hon Hai seeks to ride that wave. It is expanding its AI server assembly capacity in the US, selling an electric vehicle plant in Ohio under an arrangement in which the Taiwanese company would use the plant to manufacture AI servers, Bloomberg reported.
Hon Hai might also have benefited from the strong demand for Apple devices. The iPhone maker just reported its fastest quarterly revenue growth in more than three years on solid demand in China and said its sales in the current quarter would grow mid-to-high single digits year-on-year.
Additional reporting by staff writer
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