Hon Hai in talks with OpenAI on data center cooperation: Chairman

Taipei, Nov. 12 (CNA) Hon Hai Precision Industry Co. Chairman Young Liu (劉揚偉) said Wednesday the company has been in talks with OpenAI over cooperation in data center development.

Speaking at an investor conference, Liu said details of the collaboration with the ChatGPT developer will be announced at Hon Hai Tech Day on Nov. 21.

Liu said Hon Hai, also known internationally as Foxconn, has been working closely with major North American cloud service providers and Nvidia Corp. to build a high-speed supercomputer, making it the first "Nvidia Cloud Partner" in Taiwan.

"AI will be a key driver of Hon Hai's growth next year," Liu said, adding that the company aims to offer one-stop AI solutions expected to boost its gross margin.

During the ongoing AI boom, Liu said shipments of Hon Hai's AI server racks are forecast to grow at a "high double-digit" pace quarter-on-quarter in the fourth quarter. He added that AI server revenue is also expected to increase sequentially in the same period, contributing to higher overall sales in 2025.

In the first nine months of this year, Hon Hai's consolidated sales totaled around NT$5.5 trillion (US$177 billion), with AI server revenue reaching NT$1 trillion. The company said its AI server rack shipments in the third quarter surged 300 percent from the previous quarter.

Liu said strong global demand for AI servers has significantly boosted Hon Hai's cloud and networking division this quarter, while shipments of non-AI servers have also continued to grow.

He added that Hon Hai will continue to develop a range of AI solutions to expand its global AI server market share, which is expected to rise next year from the current 40 percent. Liu said he is "upbeat" about the company's growth prospects for 2026.

In its semiconductor operations, Liu said Hon Hai has completed the acquisition of Sharp Fukuyama Laser and will continue to develop silicon carbide (SiC) components and provide system-on-chip (SoC) design services for AI applications.

He added that with mass production of its automotive microprocessors set to begin in the fourth quarter, Hon Hai plans to showcase its advanced driver-assistance system (ADAS) technologies in the first quarter of next year. The company is also in talks with European automakers to collaborate on high-efficiency SoC design.

Regarding its electric vehicle (EV) business, Liu said Hon Hai's EV subsidiary Foxtron Inc. intends to deepen cooperation with Yulon Motor's Luxgen brand to expand its market share.

Foxtron and Luxgen have jointly launched the n7 EV model. Consumers took delivery of 7,172 units in 2024, followed by 2,787 units in the first 10 months of this year, Liu said.

Earlier this year, Foxtron said it had completed development of several EV models, with some clients already adapting those designs for their own products. The company added that it will continue to expand its EV operations under Hon Hai's contract design and manufacturing services (CDMS) business model.