Taipei: Hon Hai Precision Industry Co., the world’s largest contract electronics maker, anticipates that sales from artificial intelligence servers will surge by more than 170% in the third quarter compared to the same period last year. The company also reiterated its forecast that AI server revenue will surpass NT$1 trillion (US$33.35 billion) in 2025.
According to Focus Taiwan, Kathy Yang, Hon Hai’s rotating chief executive officer, shared these projections at an investor conference. She noted that the third quarter’s AI server sales growth would exceed the 60% year-on-year increase observed in the second quarter, thereby boosting the company’s overall sales in 2025. Specifically, sales from server racks are expected to jump by 300% compared to the previous year. Yang emphasized that the long-term growth momentum for AI servers would continue into 2026.
AI servers currently constitute more than half of Hon Hai’s total server sales. Prior to the investor conference, the company, also known globally as Foxconn, announced its highest net profit of NT$44.36 billion for the April to June period, with consolidated sales reaching NT$1.79 trillion.
The robust global demand for AI servers led to Hon Hai’s cloud and networking division accounting for 41% of total sales in the second quarter, up from 34% in the first quarter. This marks the first instance where the cloud and networking division’s sales ratio surpassed that of the iPhone assembler’s smart consumer electronics division.
Yang also stated that exports of Hon Hai-made AI servers to the United States will remain strong in the latter half of this year. The company is focusing on expanding production capacity in the U.S., where it operates 12 production sites. Specifically, Hon Hai plans to increase AI server production and liquid cooling capacity in Texas and Wisconsin, and boost cloud and networking and server capacity in Ohio.
Addressing concerns over U.S. tariff policies, Yang mentioned that Hon Hai operates 233 plants and offices across 24 countries. The company is prepared to adjust its production and logistics if needed to mitigate tariff impacts.
Hon Hai’s chief financial officer, David Huang, revealed that a NT$1 appreciation of the Taiwan dollar against the U.S. dollar could result in a 3% drop in sales. With the Taiwan dollar expected to average NT$29 to the U.S. dollar in Q3, up 10% from the previous year, Hon Hai is bracing for potential challenges. However, Huang noted that the Taiwan dollar has stabilized recently. The company plans to leverage its economies of scale, optimized procurements, and advanced automation to manage costs amidst currency fluctuations.
In terms of capital expenditure, Huang mentioned a more than 25% increase to NT$79.8 billion in the first half of this year, with further growth exceeding 20% anticipated in 2025.
Hon Hai spokesman James Wu announced that the company is collaborating with American AI chip designer Nvidia Corp. on humanoid robot development. The next generation of humanoid robotics and applications will debut at Hon Hai’s Tech Day event scheduled for Nov. 21-22.
In the electric vehicle sector, Wu cited comments from Hon Hai EV chief strategy officer June Seki, who said the company will assist its Japanese partners in developing the Model A sedan and electric buses. In the semiconductor industry, Hon Hai has signed a memorandum of understanding with France-based Thales and Radiall to form a strategic partnership and establish a joint venture aimed at developing advanced IC assembly and testing technologies.