Taipei: Taiwan-based manufacturing giant Hon Hai Precision Industry Co., commonly known as Foxconn, announced a record high net profit for the second quarter, benefiting from robust global demand for artificial intelligence servers.

According to Focus Taiwan, Hon Hai reported a net profit of NT$44.36 billion (US$1.48 billion) for the April-June period, marking a 27 percent increase from the previous year and a 5 percent rise from the previous quarter. The company’s earnings per share for the second quarter stood at NT$3.19, compared to NT$2.53 a year ago and NT$3.03 in the preceding quarter.

The company recorded NT$1.79 trillion in consolidated sales, reflecting a 15.82 percent increase year-on-year and a 9 percent rise from the first quarter. The surge in AI server demand significantly contributed to the company’s performance, with the cloud and networking division accounting for 41 percent of total sales in the second quarter, up from 34 percent in the first quarter. Conversely, the smart consumer electronics division saw a decline, representing 35 percent of total sales, down from 40 percent in the previous quarter.

Further details reveal that the computing division constituted 18 percent of total sales, a slight decrease from 19 percent in the previous quarter, while the electronic components division accounted for 6 percent of revenue, down from 7 percent. The AI server revenue experienced a substantial surge, increasing by more than 60 percent compared to the same period last year.

In terms of profitability, Hon Hai’s gross margin in the second quarter was 6.33 percent, down 0.09 percentage points year-on-year but up 0.22 percentage points from the previous quarter. The operating margin improved to 3.16 percent, up 0.28 percentage points from a year earlier and 0.33 percentage points from the first quarter. However, the net margin was 2.47 percent, up 0.21 percentage points from the previous year but slightly down by 0.09 percentage points from the previous quarter.