Nvidia Corp’s major server production partner Hon Hai Precision Industry Co reported 11% growth in quarterly sales, signalling healthy demand for AI infrastructure.
Revenue totalled NT$2.06 trillion (US$67.8 billion) in the three months to September, in line with analysts’ projections, according to a company statement.
Hon Hai’s results may lend more weight to bets on the sustainability of the post-ChatGPT boom in AI infrastructure construction. Globally, capital has poured into the suppliers of that near-unprecedented rollout, from chipmakers and networking firms to companies like Hon Hai that make servers to house Nvidia chips. Some investors have warned that valuations are unsustainable until AI services truly go mainstream.
Hon Hai, also known as Foxconn, still depends on Apple Inc for a sizable portion of its revenue by assembling the US client’s gadgets including iPhones. But as those sales plateau, it’s grown increasingly reliant on the AI boom.
The Taiwanese company has said it expects revenue from servers to more than double in the September quarter while its consumer electronics business stagnates. It’s poised to gain from its role in OpenAI’s Stargate AI infrastructure project. Last month, OpenAI unveiled plans to invest about US$400 billion to develop five new US data center sites in partnership with Oracle Corp and SoftBank Group Corp.
But seismic geopolitical shifts present threats to Hon Hai’s business. In May, it cut its full-year revenue guidance, citing potential fallout from the US-China trade war. It’s already diversifying its manufacturing footprint away from China in a bid to offset the damage.
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President Donald Trump has since declared plans to roll out a 100% tariff on semiconductor imports, though he’s promised to exempt companies that move production to the US.
With support from Apple and Nvidia, Hon Hai is expanding capacity in the US. It will add more AI server production in Wisconsin and Texas, where the company operates existing campuses, executives have said.
