AI server demand is strong, Hon Hai's sales in August increased by 10.6% year-on-year

As a major server production partner of NVIDIA, Hon Hai Precision Industry Co., Ltd. is benefiting from the ongoing strong artificial intelligence boom, which not only boosts its sales performance but also highlights the company's increasing reliance on AI business to hedge against the volatility of traditional consumer electronics.

On Friday, Hon Hai announced that the total revenue for August was NT$606.5 billion (approximately US$19.8 billion), a year-on-year increase of 10.6%, the highest for the same period in history, with a slight quarter-on-quarter decrease of 1.20%. The cumulative revenue for the first eight months of 2025 was NT$465.99 billion, a year-on-year increase of 16.65%. This growth indicates that the demand for AI infrastructure remains solid.

Hon Hai stated in a press release that with a significant increase in cloud product shipments, it expects third-quarter sales to achieve both quarter-on-quarter and year-on-year growth. This positive outlook has been echoed by the market, with analysts generally expecting the company's third-quarter sales to grow by 16.4%.

The world's largest electronics manufacturer is undergoing a profound shift in its business focus. In response to geopolitical risks and changes in market demand, the company is pinning its growth hopes on AI servers to offset the sales fluctuations of iPhones from its major client, Apple.

AI Servers as the Main Growth Engine

From the perspective of various product categories, the "cloud network product category," where the AI server business resides, continues to see strong shipments, particularly driven by the average threefold shipment target for AI servers, resulting in robust year-on-year and quarter-on-quarter growth. Although assembling Apple products, including iPhones, still accounts for a significant portion of the company's revenue, AI infrastructure is undeniably becoming the core driver of its future growth.

The "components and other product categories" also performed well due to the demand for key business components, achieving significant year-on-year growth, while the "computer terminal" product category showed slight decline due to the impact of demand momentum and exchange rate fluctuations.

Hon Hai expects that its server sales will more than double this quarter, while its consumer electronics business is shrinking. The company also cautioned that it needs to closely monitor the potential impacts of global macroeconomic and exchange rate changes.

Notably, in response to severe geopolitical changes, Hon Hai had lowered its full-year revenue guidance in May this year, explicitly stating that the potential negative impacts of U.S. tariffs were one of its main considerations. With the support of Apple and NVIDIA, Hon Hai plans to increase its AI server production capacity in its existing parks in Wisconsin and Texas to avoid Trump tariffs