Hon Hai reports highest sales for Q3 on strong demand for AI servers

Taipei, Oct. 5 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Saturday reported its highest-ever quarterly sales total for the third quarter of a year on the back of global solid demand for artificial intelligence servers.

In a statement, iPhone assembler Hon Hai, also known as Foxconn globally, said it posted NT$1.85 trillion (US$57.88 billion) in consolidated sales in the third quarter of this year, up 19.46 percent from a quarter earlier and up 20.15 percent from a year earlier.

The third quarter sales beat the previous high of NT$1.74 trillion recorded in the third quarter of 2022, according to Hon Hai.

Due to rising demand for AI development, Hon Hai said its cloud and networking division enjoyed strong sales growth both on a year-on-year and quarter-on-quarter basis in the third quarter.

Sales in Hon Hai's electronics component division also rose significantly on the back of an increase in critical component and automotive component shipments.

Hon Hai's computing division reported solid year-on-year sales growth in the third quarter due to the debut of new products, but sales stayed little changed from a quarter earlier, according to the company.

Meanwhile, its smart consumer electronics division reported robust quarter-on-quarter sales growth as new products hit the market, but year-on-year growth stayed flat from a year earlier, Hon Hai said.

In September, Hon Hai generated NT$733.0 billion in consolidated sales, up 33.69 percent from a month earlier and 10.94 percent from a year earlier, as its smart consumer electronics division reported the strongest growth than the other three divisions.

The September figure hit the second highest for September, trailing only the NT$822.3 billion recorded in September 2022.

Analysts said Hon Hai, a leading iPhone assembler, benefited from the presence of the iPhone 16 series introduced by Apple Inc. in September.

In the first nine months of this year, Hon Hai's consolidated sales rose 9.73 percent from a year earlier to NT$4.73 trillion.

The world's largest contract electronics maker said it expected sales momentum to accelerate quarter by quarter during the October-December period because of peak season effects in the global information and communication industry.

The company is scheduled to hold its annual Tech Day on Oct. 8-9 to introduce new electric vehicle models and AI servers, while an investor conference is slated to open on Nov. 14 to detail its third-quarter results and give guidance for the fourth quarter.

Meanwhile, smartphone camera lens maker Largan Precision Co., another supplier to Apple, reported on Saturday that its consolidated sales rose 17.08 percent from a year earlier to NT$6.52 billion.

However, the September figure fell 7.04 percent from a month earlier, with Largan saying that the month-on-month decline in sales came after the company shipped products to its clients ahead of schedule in August.

In August, Largan's 20-megapixel and above lenses -- which have a higher profit margin -- accounted for 10-20 percent of its total sales, with lenses of between 10 and 20 megapixels making up 60-70 percent, 8-megapixel lenses representing up to 10 percent, and other products making up 20-25 percent, the company said.

With analysts saying Largan benefited from the efforts of international smartphone brands, including Apple, to introduce new products, the Taiwanese company posted a quarterly high of NT$18.95 billion in consolidated sales in the third quarter of this year, up 72.5 percent from the second quarter and up 39 percent from a year earlier.

In the first nine months of this year, Largan's consolidated sales stood at NT$41.25 billion, up 33.23 percent from a year earlier.

Largan said it expected sales in October to stay little changed from September, while the year-on-year growth in October could moderate from September due to a relatively high comparison base over the same period of last year.