Hon Hai to invest more in U.S. with AI, EVs in focus

Taipei, Nov. 14 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co., also known as Foxconn on the global market, said on Thursday that the company will pour more funds into the United States, setting its sights on artificial intelligence and electric vehicle development.

At an investor conference held after the stock market closed on Thursday, Young Liu (劉揚偉), chairman of the iPhone assembler, said Hon Hai has invested in the U.S. market for almost 40 years, where it operates 50 facilities and employs almost 5,000 employees, generating US$25.6 billion in sales per year.

When asked to comment on possible future investments in the U.S. after Donald Trump returns to the White House in January, Liu said Hon Hai will watch closely what policies the Trump administration comes up with before adjusting its investments in the U.S. market.

However, Liu emphasized Hon Hai expects to continue to invest in the U.S. in a stable and long-term manner as the company intensifies its efforts to expand its global operations.

In the company's Wisconsin complex, Liu said Hon Hai will aim to develop more AI applications, while it is expanding its EV operations in Ohio targeting new clients.

In 2017, Hon Hai pledged to invest US$10 billion in Wisconsin to build a huge manufacturing and technology complex for production of flat panels. Trump, who was in his first term as U.S. President at the time, attended a ground breaking ceremony with Hon Hai founder Terry Gou (郭台銘) in 2018 for the Wisconsin compound located in Racine County.

However, the company later scaled back its investments in Wisconsin with Liu attributing the adjustments to changes in the market.

Since a new agreement was inked in 2021, Liu said, Hon Hai has fulfilled the agreement by investing US$1 billion in Wisconsin, featuring AI technology development and server production. Since the beginning of this year, Hon Hai has become the largest tax payer in Racine County, he said.

Liu said he is very positive about Hon Hai's expansion in the U.S. market.

Hon Hai has extended its reach globally, and in addition to the U.S., the company has invested heavily in other markets such as China and India and its investments have made great economic contributions to these markets, Liu added.

According to Liu, Hon Hai has an investment footprint in 24 countries and regions by owning more than 200 facilities and offices to help the company's operations achieve a regional balance.

Before the investor conference started, Hon Hai released its third quarter results, saying the company posted NT$49.33 billion (US$1.52 billion) in net profit, up 41 percent from a quarter earlier and 14 percent from a year earlier amid the current AI boom. Hon Hai's third quarter earnings per share (EPS) stood at NT$3.55, compared to NT$2.53 in the second quarter and NT$3.11 in the same period last year.

Previously, Hon Hai set itself the goal of achieving a 5 percent share of the global EV market, with sales forecast to hit NT$1 trillion by 2025. At the investor conference, Liu said the company is likely to miss the goal but the target will be achieved eventually, though he did not indicate how long the goal could be delayed.

Hon Hai is in talks with a Japanese car maker in EV development and the details are expected to be hammered out in the upcoming months, Liu said.

In October, Hon Hai unveiled two new electric vehicle models: Model D and Model U. one a hybrid utility vehicle (SUV) and Multi-Purpose Vehicle (MPV), the other is a mid-sized bus.

Hon Hai has sought to break into the EV market in recent years, and prior to its latest designs had introduced six EV models. The SUV Model C, the sedan Model E and the Model T e-bus designs were announced in 2021; the urban car Model B and the pick-up Model V in 2022; and the Model N electric cargo van prototype in 2023.

Quoting U.S.-based AI chip designer Nvidia CEO Jensen Huang (黃仁勳), Liu said demand for the GB200 AI server powered by Nvidia's advanced Blackwell graphics processing unit has been "insane."

Hon Hai's production of GB200 servers is on schedule, with a small amount of shipments expected to be made later this quarter and mass production set to begin in the first quarter of next year.

In the first nine months of this year, AI servers accounted for more than 40 percent of Hon Hai's server revenue, with its cloud and networking division making up more than 30 percent of the company's total revenue.

Due to robust global demand, AI servers are forecast to make up 50 percent of Hon Hai's server sales in 2025 and shipments of AI servers are likely to grow from quarter to quarter to become the most important driver of the company's sales growth, Liu said.

Looking ahead to the fourth quarter of this year, Liu said peak season effects are expected to boost sales to significantly beat the third quarter sales of NT$1.85 trillion and the same period of last year.