Foxconn expects Q1 AI server rack shipments to grow at rapid pace

Taipei, March 16 (CNA) Taiwan's Hon Hai Precision Industry Co., the world's largest contract electronics maker, said Monday that its AI server rack shipments are expected to grow at a "high double-digit" pace sequentially in the first quarter of this year.

Speaking at an investor conference, Hon Hai Chairman Young Liu (劉揚偉) said that for 2026 as a whole, AI server rack shipments could double from a year earlier and that its overall AI portfolio will likely earn a higher market share than in 2025.

The company currently has a roughly 40 percent share of the global AI server market.

A key part of achieving that goal will be the company's AI server production hub in the United States, the largest in the country, capable of rolling out 2,000 AI server racks a week in 2026.

Liu's comments came after Hon Hai reported record annual net profit in 2025 of NT$189.35 billion (US$5.92 billion), up 24 percent from a year earlier.

The company's consolidated sales also smashed records to hit NT$8.10 trillion in 2025, up 18 percent from 2024, as it benefited from strong growth in its cloud and networking division as well as its smart consumer electronics division, Liu said.

Last year, the cloud and networking division accounted for 40 percent of Hon Hai's total sales, the smart consumer electronics division 38 percent, the computing division 15 percent and the electronic component division and other products 7 percent.

Hon Hai said it was the first time that the sales share commanded by the cloud and networking division beat that of the smart consumer electronics division.

Liu said although the world economy has faced uncertainties created by tariffs, geopolitical unease and currency fluctuations, global demand for AI servers has stayed robust as large cloud service providers continued to expand their capital expenditure.

In looking ahead, Hon Hai said the cloud and networking and smart consumer electronics divisions should post strong year-over-year sales growth in the first quarter, but the computing division could see a decline in sales compared with the first quarter of 2025.

Meanwhile, Hon Hai's board approved a plan to issue a cash dividend of NT$7.2 per share for its 2025 earnings, the highest payout since the company's listing in 1991.

Based on the 2025 earnings per share of NT$13.61, its payout ratio will be 52.9 percent.