(March 16): Hon Hai Precision Industry Co is projecting strong sales growth in 2026 after posting disappointing quarterly earnings, seeking to dispel concerns about demand for the Nvidia Corp-powered servers that underpin artificial intelligence (AI) data centres.
The Nvidia partner’s AI server business will see strong growth in 2026, Hon Hai chairman Young Liu said on a post-earnings call with analysts on Monday, adding that war in the Middle East has created uncertainty around the business environment. The company has said previously that it expects its first quarter to meet market consensus.
The Taiwanese company also known as Foxconn reported net income of TWD45.2 billion (US$1.4 billion or $1.8 billion) for the quarter ended December, trailing the average analyst projection of TWD59.9 billion. The reduced profit margin was largely due to higher taxes as Hon Hai subsidiaries wired their profits back to Taiwan, chief financial officer David Huang told analysts on the post-earnings call. It previously reported a better-than-projected 22% jump in revenue during the period.
Hon Hai has established itself as a key AI hardware player by assembling servers that house Nvidia accelerators. Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp are earmarking more than US$650 billion on AI spending this year, while there have been warnings of overcapacity and lingering uncertainty over how to monetise the technology.
The Taiwanese company also derives a large portion of revenue from assembling Apple Inc’s iPhones and MacBooks, and should have benefitted 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 said the crunch should not significantly impact demand for premium handset and computer products the company makes for major customers.
See also: Samsung agrees to supply next-generation AI memory to AMD
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