Demand for AI servers remains hot, with Hon Hai Precision Industry's August revenue increasing by 10.6% year-on-year.

As the main server production partner of NVIDIA Corporation (NVDA.US), Hon Hai Precision, the parent company of Foxconn, reported that its monthly sales achieved steady growth, indicating a strong demand for artificial intelligence infrastructure in the United States. The revenue in August totaled 606.5 billion Taiwanese dollars (approximately 19.8 billion US dollars), an increase of 10.6% compared to the same period last year. The company stated that it expects the sales for the third quarter to increase on a quarter-on-quarter and year-on-year basis, as the shipment of cloud products has significantly increased. Analysts on average predict sales to increase by 16.4% in this quarter. Hon Hai Precision still relies heavily on revenue from Apple Inc. (AAPL.US), as the company assembles various electronic products including iPhones for its American clients. The company expects server sales to more than double this quarter, while its consumer electronics business is expected to shrink. This contrast highlights the company's reliance on the AI trend to make up for fluctuations in iPhone sales. The world's largest electronics manufacturer is gradually expanding its production areas to cope with drastic changes in global political situations. The company lowered its annual revenue expectations in May, citing potential impacts from the trade war between the US and China. President Trump subsequently announced a 100% tariff on semiconductor imports, but he promised exemptions for companies moving production to the US. With the support of Apple Inc. and NVIDIA Corporation, Hon Hai is expanding its capacity in the US in response to Trump's call to avoid tariffs by shifting production to the US. Executives stated that the company will establish more AI server production facilities in Wisconsin and Texas, which are where the company's existing production bases are located.