Key facts
- Hon Hai Precision Industry Co. reported quarterly sales of NT$2.51 trillion ($79 billion), beating analyst estimates.
- AI demand drove Hon Hai's sales, compensating for a decline in consumer electronics and computing products.
- Hon Hai's August revenue rose 52% year-on-year to NT$921.8B ($29.1B), driven by AI server demand.
- The company expects AI rack shipments to maintain momentum and demand for ICT products to enter peak season.
- Hon Hai signed a EUR 120 million manufacturing partnership with French firm Bull to build sovereign AI infrastructure in Europe.
Hon Hai Precision Industry Co., a key assembler of Nvidia's AI servers, reported a stronger-than-expected 40% jump in quarterly sales, signaling sustained demand for AI infrastructure. The company's revenue reached NT$2.51 trillion ($79 billion) in the three months to June, surpassing analyst estimates of NT$2.37 trillion. This growth was primarily driven by AI-related products, which helped offset a slight decline in demand for consumer electronics and computing products.
AI server shipments are anticipated to maintain their momentum in the current quarter, coinciding with the peak season for information and communication technology products. Hon Hai expects overall operations to grow both quarter-on-quarter and year-on-year. The company also announced a EUR 120 million manufacturing partnership with Bull, the French state-owned computing firm, to build sovereign AI infrastructure in Europe, with components to be assembled in France from parts made in the Czech Republic by Hon Hai.
Despite concerns about overcapacity and rising debt in the AI sector, Hon Hai's revenue has continued to climb. The company's August revenue alone rose 52% year-on-year to NT$921.8 billion ($29.1 billion). While Hon Hai also assembles products for Apple Inc., its AI server business now reportedly accounts for more revenue than all other segments combined. However, its consumer electronics business, which includes iPhone assembly, dilutes its cloud momentum, leading to gross margins below industry peers.