(Times of Update) — Hon Hai Precision Industry Co.’s revenue rose 33% in August, accelerating from the previous month on demand for servers powering AI applications.
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Foxconn, Apple Inc.’s main manufacturing partner, reported revenue of NT$548.3 billion ($17.1 billion), a record for August. That pace is up sharply from 22% growth in July.
Foxconn has started to recover from a long slump in the smartphone sector, thanks to a growing business that supplies data center operators with servers equipped with Nvidia Corp.’s AI accelerators. Last month, Foxconn said it expects revenue to rise for the rest of the year, reversing successive quarterly declines. The company’s shares are up nearly 70% in 2024.
Some investors are urging caution. Nvidia reported weaker-than-expected results, triggering a record drop. And analysts have issued fresh warnings that AI’s potential remains untested and unproven.
What Times of Update Intelligence says
Nvidia’s clarification on the ramp-up of Blackwell, its next-generation AI GPU platform, scheduled for late 2024 helps remove uncertainty over the likely growth of the AI server supply chain next year. Despite a very limited contribution from new chips this year, major ODMs such as Hon Hai, Quanta, and Wiwynn are expected to post triple-digit growth in AI server sales with exceptional shipments of systems powered by Hopper chips, Nvidia’s current core platform, in the second half of 2024.
— Steven Tseng and Sean Chen, analysts
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However, Hon Hai has set itself the goal of securing 40% of the global AI server market, leveraging relationships with several of the world’s largest technology companies and its own manufacturing expertise.
The Taiwanese company is also benefiting from demand for consumer electronics, and the addition of features and artificial intelligence improvements could encourage mobile users to upgrade their devices. iPhone shipments in China have rebounded in recent months, and the global smartphone market is recovering. Apple is preparing to unveil the iPhone 16 next week.
“As we enter the peak season in the second half of the year, we expect our business to gradually gain momentum,” the company said in a statement.
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