(April 5): Hon Hai Precision Industry Co reported a 29.7% rise in quarterly sales, a sign of sustained artificial intelligence (AI) demand during the first weeks of war in the Middle East.
Revenue for the three months ending in March grew to TWD2.13 trillion (US$66.5 billion or $85.6 billion), while analysts on average were looking for TWD$2.14 trillion.
That’s as concerns about a rush to build power-guzzling data centres are growing in the face of escalating conflict in the Middle East, which is putting pressure on global shipping routes and gas prices.
The Taiwanese company in March projected strong sales growth in 2026, fuelled by sustained AI momentum. Chairman Young Liu warned about uncertainty around the business environment stemming from the Middle East crisis, however.
Sales in the current quarter are expected to continue to grow quarter-on-quarter and year-on-year, although “it remains necessary to monitor the impact of the volatile global political and economic situation”, the company known as Foxconn said in a statement on Sunday.
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Hon Hai has established itself as a key AI hardware player by assembling servers that house Nvidia accelerators. That’s as Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp are earmarking about US$650 billion on AI spending this year, even while warnings about overcapacity and questions about how to monetise the technology linger.
The Taiwanese company also derives a large portion of revenue from assembling Apple Inc’s iPhones and MacBooks, and is in position to benefit from a strong reception for the latest iPhone 17.
Like many other electronics manufacturers, Hon Hai’s profitability has been facing growing challenges from an extended shortage of memory chips used in a wide range of products from smartphones to PCs and servers, though executives have said the crunch should not significantly impact demand for premium handset and computer products the company makes for major customers.
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