IPhone Maker Hon Hai Sustains Revenue Rebound With Help From AI

    Related

    Trump Picks Ex-Adviser Brooke Rollins for Agriculture Chief

    (Bloomberg)– President- select Donald Trump chosen Brooke Rollins...

    Catherine McKenney to compete ONDP in Ottawa Centre

    Former Ottawa metropolis councillor and mayoral prospect Catherine...

    Venezuela resistance requires mass anti-Maduro objection onDec 1

    Venezuelan resistance leaders known as Saturday for mass...

    Share


    (Bloomberg) — Hon Hai Precision Industry Co.’s income progress accelerated final quarter, sustaining a bounce-back as demand for the servers that drive AI growth offset weak smartphone gross sales.

    Most Read from Bloomberg

    Apple Inc.’s foremost manufacturing associate, also called Foxconn, reported gross sales rose 20.2% to NT$1.85 trillion ($57.9 billion) for the three months ended September from a 12 months earlier. That compares with the common analyst projection of NT$1.78 trillion compiled by Bloomberg.

    The firm mentioned the third-quarter gross sales determine was a document for that interval and exceeded its personal expectations for progress, with out specifying the estimate. Sales elevated 19% within the June quarter, the Taiwanese firm’s first income achieve since early 2023.

    Foxconn’s gross sales is helped by a rising enterprise supplying servers containing Nvidia Corp.’s AI chips. In August, it mentioned it anticipated income to develop for the remainder of the 12 months. The firm’s shares are up greater than 85% in 2024.

    What Bloomberg Intelligence Says

    Hon Hai’s gross sales progress might speed up in 2024-25 because the proliferation of AI emerges as the corporate’s key progress engine and iPhone demand stabilizes. Its vertical integration and world footprint put it in a positive place as AI server complexity will increase and demand for native manufacturing rises. More upside may very well be unlocked within the subsequent few quarters as the provision of Nvidia’s GPUs improves and new fashions reminiscent of Blackwell GB200 are launched. Smart shopper electronics and computing merchandise, which collectively accounted for 64% of complete gross sales in 1H, might stabilize as smartphone and PC demand backside out. Its EV contract manufacturing enterprise is likely to be lackluster amid a slowdown in world EV demand, and the contribution to gross sales might stay marginal.

    — Steven Tseng and Sean Chen, analysts

    Click right here for the analysis.

    Hon Hai and different {hardware} suppliers are driving a wave of spending on servers and information facilities from large tech companies together with Meta Platforms Inc. and Alphabet’s Google. But questions are effervescent up about how lengthy the spending will final with out a house run AI utility that may deliver the tech companies a return on the large infrastructure funding.

    As the world’s greatest assembler of the iPhone, the Taiwanese firm’s enterprise nonetheless stays intently tied with Apple’s. In the second quarter, about 40% of Foxconn’s income was nonetheless from the Smart Consumer Electronics class together with the iPhone, whereas Cloud and Networking Products together with AI servers, contributed to about 32%.

    Investors had anticipated a rebound in smartphone demand in 2024, although some analysts warn preliminary indicators counsel the most recent iPhone hasn’t spurred as a lot demand as anticipated.

    Most Read from Bloomberg Businessweek

    ©2024 Bloomberg L.P.



    Source link

    spot_img