iPhone maker Hon Hai Q4 sales beat expectations on strong AI demand

NVIDIA and Apple assembly partner Hon Hai Precision Industry reported better-than-expected sales growth last quarter as the artificial intelligence (AI) infrastructure buildout continued apace.

Hon Hai, also known as Foxconn, on Sunday (Jan 5) said that its revenue over the past three months was NT$2.13 trillion (S$89 billion), up 15 per cent, exceeding analyst expectations for a 13 per cent rise. December brought in NT$654.83 billion, up 42 per cent.

The company also said it expects significant sales growth for the first quarter of this year.

Hon Hai and other AI hardware suppliers in Taiwan have enjoyed a boost from massive spending on servers for data centres by the biggest US tech firms such as Alphabet and Microsoft. But the lack of a compelling use case for AI so far has been making investors nervous about when the expansion might slow.

Hon Hai expects revenue from its cloud business, which includes AI servers, to match sales from its iPhone-making division in 2025.

The AI market is important for Hon Hai’s effort to diversify its business away from Apple, whose iPhones are seeing muted growth. Apple has historically accounted for over half of the Taiwanese company’s sales.

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Hon Hai also aims to break into the electric vehicle market, though that venture has yet to have any meaningful effect on its earnings. The company reached out to Renault about a tie-up with Nissan Motor, which Renault owns 36 per cent of. For now, that pursuit is on hold as Nissan and Honda Motor negotiate a merger, Bloomberg News reported.