Nvidia Partner Hon Hai’s Sales Meet Estimates on Solid AI Demand
(Bloomberg) — Hon Hai Precision Industry Co. reported a 29.7% increase in quarterly sales; This is a sign of the continued demand for artificial intelligence in the first weeks of the war in the Middle East.
While revenue rose to NT$2.13 trillion ($66.5 billion) in the three months ending in March, analysts were looking for NT$2.14 trillion on average.
This comes amid a growing rush to build energy-hungry data centers in the face of escalating conflict in the Middle East, putting pressure on global shipping routes and gas prices.
What Does Bloomberg Intelligence Say?
Hon Hai, the world’s largest electronics manufacturer, will likely strengthen sales growth this year as shipments of AI server racks continue to rise. The Taiwanese company’s deep vertical integration and global presence give it an advantage in the face of increasing server complexity and demand for localized manufacturing. A further rise is possible with the increase in ASIC-based server projects and the subsequent deployment of the Vera Rubin platform in 2H.
-Steven Tseng and Rebecca Wang
In March, the Taiwanese company predicted strong sales growth in 2026, fueled by the sustained momentum of artificial intelligence. However, Chairman Young Liu warned of uncertainty in the business environment resulting from the Middle East crisis.
Sales this quarter are expected to continue to increase compared to the previous quarter and the same period last year, “although it is necessary to monitor the impact of the volatile global political and economic situation,” the company said in a statement on Sunday.
Hon Hai has established itself as a major AI hardware player by assembling servers housing Nvidia accelerators. This includes Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. has devoted nearly $650 billion to AI spending this year; Warnings about overcapacity and questions about how to make money from the technology remain.
The Taiwanese company also generates the bulk of its revenue from assembling Apple Inc.’s iPhones and MacBooks and is positioned to benefit from the strong response of the latest iPhone 17.
Like many other electronics makers, Hon Hai’s profitability faces growing challenges from prolonged shortages of memory chips used in a wide range of products, from smartphones to PCs to servers. But executives said the crisis should not significantly impact demand for the premium phone and computer products the company makes for large customers.
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