Foxconn sales hit record high in second quarter on AI Demand
Taipei, July 7
Hon Hai Precision Industry Co. reported record-high second-quarter sales driven by a surge in global demand for artificial intelligence servers. The Taiwan-based electronics manufacturing giant, widely known as Foxconn, experienced significant growth across its core operational divisions during the April to June period.
According to a news report by Focus Taiwan, the company generated NT$2.51 trillion (USD 78.35 billion) in consolidated sales for Q2. This figure represents a 39.83 per cent increase compared to the same period last year and an 18.02 per cent growth from the preceding quarter.
In a statement detailing the performance, Hon Hai said its cloud and networking division benefited from high demand for AI products, recording strong year-on-year sales growth in the second quarter.
The manufacturer, which acts as a primary assembler for Apple Inc.'s iPhone, noted that its expansion extended beyond AI infrastructure. Its electronic components, computing, and smart consumer electronics divisions also reported significant revenue growth in the second quarter.
As per the news report, for the month of June alone, the company registered consolidated sales of NT$821.8 billion (USD 27.1 billion), marking a 52.11 per cent jump from the previous year, though it reflected a 4.38 per cent decline from May.
The company's cumulative sales for the first half of the year reached NT$4.64 trillion (USD 153.1 billion), an increase of 34.99 per cent year-on-year. Hon Hai currently commands an estimated 40 per cent share of the global AI server market.
Looking forward to the next operational period, Hon Hai said Sunday that its third-quarter sales are likely to also show quarterly and year-on-year growth, as global demand for AI server racks is expected to remain solid during that period.
The company added that the second half of the year is usually the peak season for the information and communications technology industry, which will help drive Hon Hai's third-quarter sales growth.
As per the news report, in contrast to the growth at Foxconn, smartphone component supplier Largan Precision Co. recorded a sequential dip in its financial results. The smartphone camera lens manufacturer posted second-quarter consolidated sales of NT$13.67 billion (USD 451 million), which represents a 12.09 per cent drop from the first quarter.
Largan noted that its June sales decreased to NT$3.71 billion (USD 122.4 million), marking a 10.46 per cent decline from last year. The company stated that the drop was due to its clients' decisions to reschedule shipments.
Despite the monthly contraction, the news report mentioned that Largan's consolidated sales for the first half of the year rose 11.26 per cent from a year earlier to NT$29.21 billion (USD 964 million).
— ANI
Reader Comments
39% YoY growth is insane! But I wonder how much of this is sustainable. AI bubble might burst, and Foxconn's heavy reliance on Apple is a risk. Let's see if they can diversify their client base. Still, impressive numbers for now.
Meanwhile, Largan Precision is struggling. This shows how uneven the tech recovery is. Foxconn is gobbling up all the AI demand, but component suppliers are still facing headwinds. Indian companies should take note - don't put all eggs in one basket!
As someone working in IT supply chain, I can confirm AI server demand is absolutely exploding right now. Foxconn's 40% market share in AI servers is dominant. But with everyone from AMD to Intel and now NVIDIA building their own, competition will heat up. Smart move by them to leverage their manufacturing muscle.
Bhai, I'm happy for Foxconn, but what about workers? These companies claim AI is creating jobs, but we all know automation is replacing people. Hope Foxconn's growth translates into better wages and conditions for their employees in India and China. Numbers are great, but humans matter more.
Interesting that Foxconn is growing while Largan dips. Classic tale of AI vs traditional tech. Foxconn's diversification into cloud and networking is paying off in a big way. Apple might be their cash cow, but AI is their future. Curious how this impacts their Vietnam and India expansion plans.
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