① Hon Hai Precision Industry Co., Ltd. ( Foxconn) ① Net profit in the third quarter was NT$57.67 billion, a 30% increase compared to the previous quarter, significantly exceeding market expectations; ② Foxconn expects AI server revenue to continue to surge in the fourth quarter, and cloud network products to see "significant sequential growth and strong year-on-year growth".
Thanks to tech giants' massive investments in AI, Hon Hai Precision Industry Co., Ltd. ( Foxconn ), the world's largest electronics contract manufacturer, delivered a third-quarter report on Wednesday with profits significantly exceeding expectations, and gave an extremely optimistic outlook for its AI-related businesses.
In terms of performance figures, Foxconn achieved revenue of NT$2.058 trillion (approximately RMB472 billion) in the third quarter, in line with expectations; net profit was NT$57.67 billion (approximately RMB13.2 billion), a 30% increase compared to the previous quarter, significantly exceeding market expectations of NT$50.4 billion.
In the past, the capital market has always regarded Foxconn as " Apple". While Foxconn was once known as a contract manufacturer, with the significant increase in the importance of the AI industry and its leading position in AI server manufacturing, investors are now paying more attention to the progress of Foxconn's AI-related businesses.
Foxconn Chairman Liu Yangwei said at an investor conference on Wednesday that the demand for consumer smart products in the fourth quarter of this year will be better than last year, but after taking into account the impact of exchange rates, the year-on-year data will decline slightly.
Liu Yangwei also stated that with the new generation of AI server racks beginning to ship in large quantities in the fourth quarter, AI server revenue is expected to continue to surge, especially with accelerated revenue growth from carrier customers (CSPs). Therefore, Foxconn anticipates "significant sequential growth and strong year-on-year growth" for its cloud network products in the fourth quarter.
Hon Hai's IR director, Wu Chun-yi, later added that Hon Hai's overall AI rack shipments in the third quarter achieved its target of "a 300% increase quarter-on-quarter," and its AI server revenue for the first three quarters also reached NT$1 trillion ahead of schedule. Hon Hai expects AI server shipments in the fourth quarter to show "double-digit percentage growth quarter-on-quarter."
Wu Junyi also stated that as AI solutions such as GPUs and ASICs become more diversified, Foxconn's market share in the server market next year will be higher than the current level of at least 40% .
Looking ahead to 2026, Liu Yangwei stated that the importance of the AI industry will increase significantly.
Liu Yangwei cited an example, stating that the capital expenditure of the top five CSPs in the US could reach $600 billion by 2026. Adding investments in sovereign AI, the AI market could reach $1 trillion within two to three years. In the subsequent Q&A session, he also indicated that he felt this investment scale would continue to be revised upwards, but the specific upward revision figure required further data.
As a point of interest for the capital market, Liu Yangwei also mentioned that some cooperation information with OpenAI will be disclosed during the "Foxconn Technology Day" event next week, and investors are encouraged to look forward to it.
As background, Nvidia Earlier this year, Foxconn announced plans to build an AI industry chain in the United States, including a new server factory in Texas.
In August, Liu Yangwei stated that SoftBank would acquire Foxconn's electric vehicle factory in Ohio and transform it into an artificial intelligence facility. The server manufacturing base will continue to be operated by Foxconn . This is also the first manufacturing base in SoftBank and OpenAI's "Stargate" project.
Foxconn is also investing in AI server production capacity in Texas, California, and Wisconsin, and has a presence in Mexico. Liu Yangwei stated last week that AI humanoid robots will be deployed at their Texas factory within months. Manufacturing AI servers .
(Article source: CLS)
