Nvidia Corp’s major server production partner Hon Hai Precision Industry Co (鴻海精密) reported 10.99 percent year-on-year growth in quarterly sales, signaling healthy demand for artificial intelligence (AI) infrastructure.
Revenue totaled NT$2.06 trillion (US$67.72 billion) in the last quarter, in line with analysts’ projections, a company statement said.
On a quarterly basis, revenue was up 14.47 percent.
Photo: Tyrone Siu, Reuters
Hon Hai’s businesses cover four primary product segments: cloud and networking, smart consumer electronics, computing, and components and other products.
Last quarter, “cloud and networking products delivered strong growth, components and other products demonstrated significant growth, while smart consumer electronics and computing products slightly declined,” compared with the same period last year, Hon Hai said.
In the first nine months of this year, revenue totaled NT$5.5 trillion, up 16.27 percent year-on-year, it said.
Hon Hai’s results might lend more weight to bets on the sustainability of the post-ChatGPT boom in AI infrastructure construction.
Globally, capital has poured into the suppliers of that near-unprecedented rollout, from chipmakers and networking firms to companies such as Hon Hai that make servers to house Nvidia chips. Some investors have warned that valuations are unsustainable until AI services truly go mainstream.
Hon Hai, also known as Foxconn Technology Group (富士康科技集團), still depends on Apple Inc for a sizeable portion of its revenue by assembling the US client’s gadgets including iPhones. However, as those sales plateau, it has grown increasingly reliant on the AI boom.
The Taiwanese company has said it expects revenue from servers to more than double in the third quarter while its consumer electronics business stagnates.
It is poised to gain from its role in OpenAI’s Stargate AI infrastructure project. Last month, OpenAI unveiled plans to invest about US$400 billion to develop five new US data center sites in partnership with Oracle Corp and Softbank Group Corp.
With support from Apple and Nvidia, Hon Hai is expanding capacity in the US.
It is to add more AI server production in Wisconsin and Texas, where the company operates existing campuses, executives have said.
Looking ahead, “operations are expected to maintain sequential quarterly growth as AI server shipments continue to ramp up in the fourth quarter and ICT [information and communications technology] products are entering the traditional peak season in the second half of 2025,” the company said.
“However, the impact of the global political and economic situation and exchange rate fluctuations will need continued close monitoring,” it added.
Additional reporting by staff writer
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