(Bloomberg) – Hon Hai Precision Industry Co., a leading server production partner at Nvidia Corp., reports 11% growth in quarterly sales, indicating healthy demand for AI infrastructure.
Revenue totaled to $2.06 trillion ($67.8 billion) for the three months ended September, according to a company statement.
Hon Hai's results could give more weight to bet on the sustainability of the post-chat boom in building AI infrastructure. Globally, Capital has been poured into suppliers of its almost prerequisite deployment, ranging from chip makers and networking companies to companies like Hon Hai, to companies like Hon Hai, who make servers to house Nvidia chips. Some investors warn that valuations are unsustainable until AI services truly become mainstream.
Hon Hai, also known as Foxconn, relies on Apple Inc. for a significant portion of its revenue by assembling gadgets for US clients, including the iPhone. However, these sales plateaus are increasingly dependent on the AI boom.
The Taiwanese company says it expects revenue from servers to more than double in the September quarter, but its consumer electronics business is stagnating. You're ready to get from your role in Openai's Stargate AI Infrastructure Project. Last month, Openai announced plans to work with Oracle Corp. and Softbank Group Corp. to invest approximately $400 billion to develop five new US data center sites.
However, the geopolitical changes in the earthquake pose a threat to Hong Hai's business. In May, it cut its year-round revenue guidance, citing potential fallout from the US-China trade war. To offset the damage, we are already diversifying our manufacturing footprint from China.
President Donald Trump has since declared plans to implement 100% tariffs on semiconductor imports, but has pledged to exempt companies moving production to the United States.
With support from Apple and Nvidia, Hon Hai is expanding its US capabilities. This adds production of AI servers in Wisconsin and Texas, and existing campuses are operating, executives said.
Read: foxconn operates SoftBank StargateAI server site in Ohio
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