AI server demand is strong, Foxconn's August sales increased by 10.6% year-on-year.
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As Nvidia’s primary server manufacturing partner, Hon Hai Precision Industry Co., Ltd. is benefiting from the ongoing AI boom, which not only boosts its sales performance but also highlights the company’s increasing reliance on AI business to hedge against the volatility of its traditional consumer electronics segment.
On Friday, Hon Hai announced that its total revenue for August reached NT$606.5 billion (approximately $19.8 billion), up 10.6% year-on-year, the highest for the same period in history, and down slightly by 1.20% month-on-month. Cumulative revenue for the first eight months of 2025 was NT$4,659.9 billion, up 16.65% year-on-year. This growth indicates that market demand for AI infrastructure remains robust.
Hon Hai stated in a statement that with the sharp increase in shipments of cloud products, it expects third-quarter sales to record both sequential and year-on-year growth. This positive outlook has been echoed by the market; analysts generally expect the company’s third-quarter sales to grow by 16.4%.
The world’s largest electronics manufacturer is undergoing a profound shift in its business focus. In responding to geopolitical risks and changing market demand, the company is pinning its growth hopes on AI servers to offset the fluctuations in iPhone sales from its major client, Apple.
AI Servers Become the Main Growth Engine
By product category, the “cloud and networking products” segment, which includes the AI server business, continued to post strong shipments, especially driven by AI server shipments averaging three times above targets, resulting in robust year-on-year and sequential growth in this category. While assembling Apple products, including iPhones, remains a significant revenue source, AI infrastructure is undeniably becoming the core driver of future growth.
The “components and other products” category also performed well due to strong demand for major business components, posting significant yearly growth, while the “computer terminal” category saw slight declines affected by weaker demand and currency fluctuations.
Hon Hai expects that its server sales this quarter will more than double, while its consumer electronics business is contracting. The company also cautioned that it still needs to closely monitor potential impacts from global macroeconomic and currency fluctuations.
Notably, to cope with dramatic geopolitical shifts, Hon Hai already lowered its full-year revenue guidance this May, explicitly stating that potential negative impacts from US tariffs are a primary concern. Backed by Apple and Nvidia, Hon Hai will add more AI server capacity to its existing campuses in Wisconsin and Texas to avoid Trump tariffs.
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