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.
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