Nvidia AI Server-Maker Hon Hai Signals Stronger Revenue Outlook

(Bloomberg) — Hon Hai Precision Industry Co., the main supplier of Nvidia Corp. AI servers, posted a 3% rise in January sales and strengthened its first-quarter outlook.

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Hon Hai, also the world’s largest assembler of Apple Inc. iPhones, reported revenue of NT$538.7 billion ($16.4 billion) last month. The comparison with 2024 was skewed by the fact that the week-long Lunar New Year break fell this year in January, versus February 2024.

As Nvidia’s most important AI server maker, Hon Hai’s performance is a bellwether for the AI infrastructure build-out. It said first-quarter sequential growth, or the increase from the December quarter, would be “better than the average level” of the past five years. That’s a rosier projection than the “roughly similar levels” the company teased last month. Growth on a year-over-year basis will be strong, a better outlook as well than that stated before.

Hon Hai, which ships electronics to the rest of the world from giant production bases in China, is grappling this year with uncertainty surrounding Trump-administration tariffs and the sustainability of the AI boom. While big tech firms from Microsoft Corp. to Amazon.com Inc. this month pledged to continue spending to keep pace with a revolutionary technology, Chinese startup DeepSeek’s rise has spurred doubts about whether all that infrastructure expenditure is justified.

What Bloomberg Intelligence Says

Hon Hai’s future growth is increasingly tied to AI servers — a segment in which it competes with other original design manufacturers such as Quanta, Inventec and Wistron. Though the company is set to remain the largest iPhone assembler for the foreseeable future, it’s slowly ceding share to rivals Luxshare and Tata. Hon Hai’s sales growth aligns with electronics manufacturing peers, with robust growth in the cloud segment offset by slower consumer electronics. Its profitability and valuation are both below peer average, dragged lower by iPhone assembly operations.

– Steven Tseng and Sean Chen, analysts

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