Hon Hai sees AI servers as sales driver in 2024

Taipei, Feb. 17 (CNA) Hon Hai Precision Industry Co., the world's largest contract electronics maker, expects AI servers to be an important driver of the company's sales growth in 2024.

Speaking after a ceremony held on Saturday to get the blessings of local gods in the new Year of the Dragon, spokesman James Wu (巫俊毅) said artificial intelligence development is expected to see rapid growth in 2024 and 2025.

Given that growth and the more than 40 percent share of the global AI server market already held by Hon Hai, known globally as Foxconn, and other companies under its corporate umbrella, AI-related products such as servers should spur sales growth in the coming year, Wu said.

As Hon Hai forges closer business ties with its clients at a time when global supply chains are improving, Wu said the contribution of AI-related devices to the company's sales will become even more evident.

He did not provide, however, any growth forecast for Hon Hai's sales generated from AI-related devices.

At an investor conference held in August 2023, Hon Hai Chairman Young Liu (劉揚偉) said his company accounted for more than 70 percent of global sales in graphics processing unit (GPU) substrates and GPU modules used in AI server production.

In 2023, Hon Hai had consolidated sales of NT$6.16 billion (US$196 billion), down 6.98 percent from a year earlier in the wake of global demand weakness caused by inflation and high interest rates in developed markets.

Still, the 2023 revenue figure was the second highest in the company's history, behind the NT$6.62 trillion in consolidated sales seen in 2022.

In addition to AI-related applications, Wu said Hon Hai has eyed international electric vehicle brands as potential partners, hoping to help them roll out their own products in international markets instead of trying to launch Hon Hai's own EV brand.

Wu said Luxgen Motor Co., a subsidiary of Yulon Motor, has received orders for 9,000 n7 SUVs, which is made based on the Model C SUV prototype unveiled by Hon Hai in October 2021, and the delivery of the 9,000 n7 SUVs is expected to completed in the first half of this year.

Local news media reported that Hon Hai is seeking orders from Chinese EV makers.

Hon Hai has led the Mobility in Harmony (MIH) Consortium, which serves as an EV open platform and has an ambition to transform the platform to become the "Android of the electric vehicle industry."

To date, the MIH alliance has 2,739 members from 73 countries and regions around the world.

The MIH consortium EV open platform, became operational in July 2021 as part of Hon Hai's efforts to enter the EV market and diversify from contract manufacturing into hardware and software capabilities.