(Bloomberg) — Nvidia Corp.\u2019s major server production partner Hon Hai Precision Industry Co. reported 11% growth in quarterly sales, signaling healthy demand for AI infrastructure. <\/p>\n
Revenue totaled NT$2.06 trillion ($67.8 billion) in the three months to September, in line with analysts\u2019 projections, according to a company statement.\u00a0 <\/p>\n
Hon Hai\u2019s results may lend more weight to bets on the sustainability of the post-ChatGPT boom in AI infrastructure construction. Globally, capital has poured into the suppliers of that near-unprecedented rollout, from chipmakers and networking firms to companies like Hon Hai that make servers to house Nvidia chips. Some investors have warned that valuations are unsustainable until AI services truly go mainstream. <\/p>\n
Hon Hai, also known as Foxconn, still depends on Apple Inc. for a sizable portion of its revenue by assembling the US client\u2019s gadgets including iPhones. But as those sales plateau, it\u2019s grown increasingly reliant on the AI boom. <\/p>\n
The Taiwanese company has said it expects revenue from servers to more than double in the September quarter while its consumer electronics business stagnates. It\u2019s poised to gain from its role in OpenAI\u2019s Stargate AI infrastructure project. Last month, OpenAI unveiled plans to invest about $400 billion to develop five new US data center sites in partnership with Oracle Corp. and SoftBank Group Corp.\u00a0 <\/p>\n
But seismic geopolitical shifts present threats to Hon Hai\u2019s business. In May, it cut its full-year revenue guidance, citing potential fallout from the US-China trade war. It\u2019s already diversifying its manufacturing footprint away from China in a bid to offset the damage. <\/p>\n
President Donald Trump has since declared plans to roll out a 100% tariff on semiconductor imports, though he\u2019s promised to exempt companies that move production to the US.\u00a0 <\/p>\n
With support from Apple and Nvidia, Hon Hai is expanding capacity in the US. It will add more AI server production in Wisconsin and Texas, where the company operates existing campuses, executives have said. <\/p>\n
Read: Foxconn to Operate SoftBank\u2019s Stargate AI Server Site in Ohio <\/p>\n