Hon Hai expects cloud, networking to top 60% of revenue on AI demand

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Hon Hai Precision Industry Co., known globally as Foxconn, said Thursday it expects cloud and networking products to account for more than 60 percent of its revenue in three to five years, up from 54 percent in the third quarter, as demand for artificial intelligence (AI) drives growth.

Taipei, Nov. 12 (CNA) Hon Hai Precision Industry Co., known globally as Foxconn, said Thursday it expects cloud and networking products to account for more than 60 percent of its revenue in three to five years, up from 54 percent in the third quarter, as demand for artificial intelligence (AI) drives growth.

At an investor conference, Hon Hai Chairman Young Liu (劉揚偉) said demand for AI applications is expected to remain strong and outpace supply, further increasing the share of revenue from cloud and networking products.

Net profit rose 34 percent from a year earlier to a record NT$77.52 billion (US$2.35 billion).

Consolidated sales reached NT$3.02 trillion, up 46 percent from a year earlier. Cloud and networking products accounted for 54 percent of the total, up from 51 percent in the second quarter.

Liu said he expects Hon Hai to continue to benefit from growing AI demand in 2027 as major cloud service providers have pledged to increase capital spending on AI infrastructure.

Hon Hai has been diversifying its product portfolio and integrating its hardware and software capabilities, Liu said. He expects shipments of AI racks to grow at a high double-digit rate in the fourth quarter, helping lift the company's profit.

He said he expects that pace of growth to continue into 2027 as Hon Hai offers a range of products and services to increase its market share.

Still, Liu said he would keep a close eye on U.S. AI policy following the midterm elections, in which Democrats won control of the Senate and House, amid concerns about possible restrictions on AI data center development.

Liu said supplies of wafers, memory chips and other key components are expected to remain tight this year. He expects the shortages to ease gradually as manufacturers seek to expand capacity.

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