Foxconn Industrial Internet Co (FII, 工業富聯), a subsidiary of Hon Hai Precision Industry Co (鴻海精密), yesterday said it expects strong growth this year, driven by booming demand for artificial intelligence (AI) and high-end interconnects.
FII, 84 percent owned by Hon Hai, was listed on the Shanghai Stock Exchange in June 2018 and focuses on smart manufacturing, AI-related applications and the industrial Internet.
Last year, FII’s net profit rose 52 percent year-on-year to 35.29 billion yuan (US$5.17 billion), which translated into earnings per share of 1.78 yuan, up 52.1 percent from 1.17 yuan a year earlier, FII chief financial officer Michael Shen (沈道邦) told an investors’ conference.
Photo courtesy of Hon Hai Precision Industry Co
Revenue last year increased 48.2 percent year-on-year to 902.89 billion yuan, reflecting the company’s ability to capitalize on the AI boom and improvements in its overall operations, Shen said.
FII became the biggest manufacturer in Shenzhen by revenue, surpassing Shenzhen-based Huawei Technologies Co (華為), BYD Co (比亞迪) and Tencent Holdings Ltd (騰訊控股) last year, companies’ data showed.
AI has become FII’s core growth driver since last year, with cloud computing revenue surging 88.7 percent year-on-year to account for 66.75 percent of total revenue, company chairman Brand Cheng (鄭弘孟) said.
Communications and mobile network equipment business accounted for the other 33 percent, Cheng said.
AI server revenue more than tripled from a year earlier, while shipments of switches above 800G surged more than 13-fold, he said.
Shipments of precision mechanical components, including server chassis, also posted double-digit annual growth, he added.
This year, shipments of AI servers and related rack products — including Nvidia Corp’s GB200, GB300 and next-generation Vera Rubin platforms — are expected to continue growing, FII rotating CEO Liu Zong-chang (劉宗長) said.
Vera Rubin platform-based servers are set to enter mass production in the third quarter, Liu said.
In terms of key technology deployment, liquid-cooled servers are expected to account for a larger share of FII’s total server capacity this year, driven by rapid adoption by major clients, FII said.
About 60 percent of key components per server rack are now developed in-house, which enhances value-added and raises entry barriers in server production, the company said.
Regarding its recent push into the copackaged optics (CPO) business, Liu said the company’s CPO switches have begun sampling shipments last quarter and are slated for mass production next quarter.
CPO switch shipments are expected to exceed 100,000 units this year and reach 200,000 units by 2030, FII said.
Excluding integrated circuit costs, gross margin for such products is expected to remain above a double-digit percentage, making CPO a key future profit driver, the company said.
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