Hon Hai Precision Industry Co (鴻海精密) yesterday reported a stronger-than-expected increase in quarterly profit, highlighting sustained spending on hardware essential for artificial intelligence (AI).
Net profit for the first quarter of this year rose 19 percent year-on-year to NT$49.92 billion (US$1.58 billion), while analysts on average expected NT$48.4 billion.
Operating profit was NT$75.6 billion, surging 63 percent from a year earlier, the company said.
Photo: Cheng I-Hwa, AFP
Earnings per share reached NT$3.56, up from NT$3.03 last year, while gross margin hit 6.18 percent and operating margin stood at 3.57 percent, it said.
Net profit and operating profit were record highs for the first quarter, Hon Hai rotating chief executive officer Michael Chiang (蔣集恆) told an earnings conference.
Revenue in the first quarter rose 29 percent year-on-year to NT$2.12 trillion, the highest for the same period, company data showed.
“AI demand continues to grow at a rapid pace,” and for the second quarter “year-on-year growth is expected to be strong,” Chiang said.
Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has established itself as a key AI hardware player by assembling servers that house Nvidia Corp accelerators. The company also derives a significant chunk of sales from assembling Apple Inc’s iPhones and MacBooks, and is in position to benefit from any positive reception for the latest iPhone 17 product family.
Cloud and networking products — including AI servers — remained the company’s largest revenue contributor in the first quarter, accounting for 48 percent of its revenue, while smart consumer electronics contributed 33 percent, Hon Hai said.
Computing products, and components and other products, made of 14 percent and 5 percent of the revenue respectively, it said.
Copackaged optic switches are scheduled to enter mass production in the third quarter, with annual shipments expected to reach tens of thousands of units, Chang said.
Based on current visibility, shipments are projected to grow multifold next year, he said.
In addition to switch design and assembly, the company said it would continue to improve its capabilities in key components such as optical modules, optoelectronic integration, cables, connectors, high-speed transmission and power management.
For AI rack shipments, the company expects to maintain high double-digit growth in the second quarter, it said.
For the full year, AI rack shipments are projected to more than double, with quarterly volumes increasing sequentially as customer projects progress, it added.
In robotics, the company’s humanoid robots and collaborative robots have already been introduced at US manufacturing sites in the second quarter, adding that operational data would be collected to support subsequent model optimization and large-scale deployment.
The company expects capital expenditure this year to rise more than 30 percent from last year’s NT$174 billion, with investments primarily focused on regional manufacturing deployment, automation implementation and the upgrading of core capacity, it said.
However, Chiang cautioned that “the international political and economic landscape [is] still evolving rapidly,” with factors such as raw material costs and supply chain adjustments potentially impacting the industry.
“We remain cautiously optimistic about this year,” thanks to the company’s “relatively solid operational resilience,” he said.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS