Hon Hai expects AI server sales to top NT$1 trillion in 2025

Taipei, March 14 (CNA) Hon Hai Precision Industry Co., the world's largest contract electronics maker, said Friday that during the current boom in demand for artificial intelligence applications, the company expects to see sales generated from AI servers top NT$1 trillion (US$30.30 billion) in 2025.

At an investor conference, Hon Hai Chairman Young Liu (劉揚偉) said that the company's revenue from AI servers grew by more than 150 percent year-over-year in 2024.

He added that sales are expected to continue rising, surpassing the NT$1 trillion mark this year, which would help the iPhone assembler secure over 40 percent of the global AI server market.

AI servers will make up about 50 percent of the company's total server revenue in 2025, Liu said.

Before the investor conference, Hon Hai reported its 2024 results, in which the company posted a new high of NT$152.71 billion in net profit, up 7 percent from a year earlier, while consolidated sales stood at a record high of NT$6.86 trillion, up 11 percent from the previous year.

While Hon Hai, better known internationally as Foxconn, did not disclose other details about AI server sales in 2024, it has said smart consumer electronics accounted for 46 percent of total sales in 2024, while its cloud and networking products accounted for 30 percent, computing 18 percent, and electronic components 6 percent.

Looking ahead to the first quarter of this year, Liu said Hon Hai's cloud and networking division is expected to see significant growth from the fourth quarter of last year and a sharp year-over-year increase.

This growth is driven by strong demand for GB200 servers powered by Nvidia Corp.'s GPUs, which is expected to boost the company's AI server sales, Liu said.

After the first quarter, Hon Hai AI server shipments are expected to grow each quarter this year, Liu added.

Due to the strong performance of AI servers, Liu said, it is possible that the ratio of the company's cloud and networking sales to total sales will come closer to that enjoyed by the smart consumer electronics division this year.

Hon Hai's computing division will see sales fall from the previous quarter early in the first quarter but grow sharply from a year earlier, while the electronic components division will also report a quarter-on-quarter drop in sales but a strong year-on-year increase in the second quarter.

As for its electric vehicle (EV) development, Liu said the company expects to sign agreements with two Japanese clients in two months to use the contract design and manufacturing services (CDMS) business model in EV development.

In addition, EVs made based on Hon Hai sport utility vehicle Model C are scheduled to begin commercial production in the North America market in the fourth quarter of this year.

The company is also working with automakers in the Middle East on EV software design including smart cabin development.

Urban car Model B is scheduled to start mass production in the middle of this year, Liu said.

Hon Hai has also devoted itself in humanoid robot development, setting its sights on healthcare services, he added.

Amid escalating tariff actions launched by the Trump administration, Hon Hai is keen to expand production in the United States, Liu said.

Hon Hai started investing in the U.S. in 1987 before it went to China in 1988. Hon Hai started investments in Mexico in 2004, in India in 2006 and in Vietnam in 2007, according to Liu.

Hon Hai has invested in 24 countries around the world and operates 223 facilities. From 2022-2024, the company spent more than NT$340 billion to expand production worldwide and its global expansion is expected to make it resilient amid U.S. tariff, Liu said.

The iPhone assembler has recently made significant efforts to diversify its portfolio through its '3 plus 3' strategy, aiming to evolve from a pure contract manufacturer into a company that integrates hardware and software capabilities.

The initiative covers three emerging industries -- EVs, robots and digital health care -- which the company said it is developing via AI, semiconductor and communications technologies, with EVs as the core business.