Hon Hai could leverage Mitsubishi's power module strength with MOU: Analysts

Taipei, Nov. 8 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. is expected to take advantage of the strength of Japan's Mitsubishi Electric Corp. in power module supply for the development of artificial intelligence data center solutions, after signing an MOU with the Japanese company, according to analysts.

In a statement issued on Thursday, iPhone assembler Hon Hai, also known as Foxconn globally, said it has signed a memorandum of understanding (MOU) with Mitsubishi for the development of artificial intelligence data center solutions.

According to statistics released by market information advisory firm OMDIA, Mitsubishi ranked the second globally in market share in power module, while the Japanese firm took the first spot in market share in the high voltage direct current (HVDC) technology that uses voltage source converters (VSC).

Analysts said Hon Hai is expected to leverage the Japanese partner's strength in AI infrastructure development as power supply is critical to data centers.

In the statement, Hon Hai said that the cooperation with Mitsubishi is expected to utilize the know-how and networks of both companies to facilitate the global supply of energy-efficient and highly reliable AI data center solutions.

"In the future, the two companies aim to jointly create new values, solutions and business models outside the AI data center field by leveraging their knowledge assets in the process of addressing social issues such as sustainability," Hon Hai said.

According to Hon Hai, which has intensified its efforts in AI development in recent years to diversify its product portfolio, Mitsubishi has operated a wide range of businesses such as social systems, energy systems, defense and space systems, factory automation systems, automotive equipment, building systems, air conditioning and home appliances, digital innovation, and semiconductors.

In a separate statement issued earlier this week, Hon Hai said it posted a monthly record high of NT$895.71 billion (US$28.89 billion) in conciliated sales in October, up 11.29 percent from a year earlier and up 7 percent from a month earlier.

Hon Hai said the growth largely reflected solid demand for AI servers, while shipments in computing devices also rose on the debut of new products as well as an increase in clients' inventories eyeing a year-end buying spree.

In the first 10 months of this year, Hon Hai's consolidated sales grew 15.55 percent from a year earlier to NT$6.39 trillion.

The company has scheduled an investor conference for Wednesday to detail its third quarter results and give more guidance for the fourth quarter as well as the entire 2025.

In the third quarter, Hon Hai generated NT$2.06 trillion in consolidated sales, up 14.47 percent from a quarter earlier and up 10.99 percent from a year earlier on the back of strong shipments in cloud and networking devices.