Hon Hai sales top forecasts as AI server demand keeps rising
Foxconn parent Hon Hai reported a 40% quarterly sales increase, helped by demand for AI servers using Nvidia chips.
By Sofia Marchetti · World Affairs Correspondent
3 min read
Hon Hai Precision Industry reported quarterly sales that beat analyst expectations, underscoring the continuing demand for hardware used in artificial intelligence data centers. The Taiwanese manufacturer, also known as Foxconn, said demand tied to AI products helped offset softer areas of its electronics business, according to Bloomberg.
The company said revenue reached NT$2.51 trillion, or about $79 billion, in the three months through June, Bloomberg reported. That was above the average analyst estimate of NT$2.37 trillion and represented a 40% increase in quarterly sales, according to Bloomberg.
Hon Hai said in a Sunday statement that shipments of AI racks should keep their momentum in the current quarter. The company also said demand for information and communications technology products is entering its peak season, and it expects overall operations to grow from both the previous quarter and the same period a year earlier.
AI servers drive the quarter
Hon Hai has become a major supplier in the AI hardware buildout by assembling servers that contain Nvidia accelerators, Bloomberg reported. The company is one of Nvidia’s server assembly partners, placing it close to one of the strongest areas of technology spending.
Demand for AI-related products powered the sales gain, while Hon Hai saw a slight decline in demand from consumer electronics and computing products, according to Bloomberg. The company’s results show how AI infrastructure spending is helping electronics manufacturers even as other device categories are less robust.
Bloomberg reported that Alphabet, Amazon, Meta Platforms and Microsoft are allocating about $725 billion for AI spending this year. That spending is continuing despite warnings about possible overcapacity and questions over how companies will make money from AI technology, Bloomberg reported.
Concerns have also grown around the energy demands of data centers, Bloomberg reported. Since conflict began in the Middle East, pressure on global shipping routes and gas prices has added to worries around the rapid buildout of power-hungry facilities, according to Bloomberg.
Apple business and chip supply remain factors
Hon Hai had projected strong sales growth for 2026 in March, citing continued AI momentum, Bloomberg reported. The company also gets a significant share of its sales from assembling Apple products, including iPhones and MacBooks.
Bloomberg reported that Hon Hai could benefit if Apple’s latest iPhone 17 family is well received. The company’s consumer electronics exposure remains a major part of its business even as AI servers become a stronger growth driver.
Hon Hai, like other electronics manufacturers, is dealing with a shortage of memory chips used across smartphones, personal computers and servers, Bloomberg reported. Company executives have said the tight supply should not have a significant effect on demand for premium handset and computer products it makes for major customers, according to Bloomberg.
The latest sales report adds to evidence that AI server demand remains strong for suppliers tied to Nvidia’s ecosystem. Hon Hai’s outlook for the current quarter points to continued growth, while its broader business still depends on consumer devices and component availability.
This story draws on original reporting from Fortune.