Driven by the demand for servers propelled by the artificial intelligence boom, Hon Hai's profits in the third quarter exceeded expectations, and it is anticipated that its AI server business will continue to grow strongly next year.
On November 14, Foxconn's parent company Hon Hai held a corporate briefing for the third quarter of 2024. The company's chairman, Liu Yangwei, stated that AI will be the most important growth driver in the ICT industry and products by 2025. The company expects its AI server shipments to grow quarter by quarter, with AI servers accounting for 50% of the company's total server revenue by 2025.
Liu Yangwei also pointed out that 2025 will be the &#34;Year of AI.&#34; At the same time, Hon Hai maintains its expectation of &#34;significant&#34; sales growth in 2024, with fourth-quarter revenue expected to continue to achieve year-on-year growth.
Regarding the third-quarter performance, he stated that Hon Hai's performance exceeded expectations, with gross margin and revenue reaching new highs for the same period. Thanks to the strong demand for AI servers, the company's net profit in the third quarter reached NT$49.325 billion (approximately US$1.52 billion), a year-on-year increase of 14%, surpassing analysts' expectations of NT$46.09 billion. Revenue grew by 20% year-on-year to NT$1.855 trillion, setting a quarterly historical record.
In addition, Hon Hai revealed that it is building the world's largest manufacturing plant in Mexico for assembling NVIDIA's GB200 super chip, which is a core component of NVIDIA's next-generation Blackwell computing platform.
As the world's largest iPhone assembler, Hon Hai's business is closely related to Apple's operations, with about 40% of its revenue in the second quarter coming from smart consumer electronics, including iPhones. At the same time, Hon Hai has been actively diversifying its business lines in recent years, playing an increasingly important role in building AI servers for companies like Amazon and NVIDIA. The company's cloud and networking business, which includes AI servers, is the second-largest source of revenue after consumer electronics, accounting for 32% of total revenue in the third quarter.
Despite a global market sell-off triggered by concerns over a slowdown in the U.S. economy, which caused Hon Hai's stock price to drop by more than 10% in the third quarter, its stock price for the year has still doubled, far exceeding the market average.
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Hon Hai's net profit in the third quarter increased by 14% year-on-year, with revenue reaching a quarterly record high. The company maintains its expectation of "significant" sales growth in 2024 and anticipates that AI servers will account for 50% of the company's total server revenue next year

- Driven by the surge in AI demand, Hon Hai's Q3 profits exceeded expectations, with a net profit of NT$ 49.325 billion, a 14% year-on-year increase.  
- The company anticipates strong growth in its AI server business, projecting that by 2025, AI servers will account for 50% of its total server revenue.  
- Despite a 10% drop in stock price due to global market concerns, Hon Hai's stock has doubled over the year, significantly outperforming the market.

Strong demand for AI! Hon Hai: AI server revenue will account for 50% next year