(Bloomberg) — Nvidia Corp.’s major server production partner Hon Hai Precision Industry Co. reported solid monthly sales growth, signaling demand for AI infrastructure remains intact in the US.
Revenue for August totaled NT$606.5 billion ($19.8 billion), up 10.7% year-over-year. Analysts on average were looking for a 16.4% increase in the third-quarter sales. Hon Hai said in a statement that it expects third-quarter sales to grow sequentially and year-over-year.
The Taiwanese company also still depends on Apple Inc. for a sizable portion of its revenue by assembling the US client’s gadgets including iPhones.
Hon Hai, also known as Foxconn, expects sales of servers to more than double this quarter while its consumer electronics business dwindles. The contrast underscores how it’s relying on the AI boom to offset volatile iPhone sales.
The world’s largest electronics manufacturer is diversifying its manufacturing footprint away from China as it seeks to navigate seismic geopolitical shifts. It already cut its full-year revenue guidance in May, citing potential fallout from the US-China trade war. President Donald Trump has since declared plans for a 100% tariff on semiconductor imports, though he’s promised to exempt companies that move production to the US.
With support from Apple and Nvidia, Hon Hai is expanding capacity in the US — heeding Trump’s call to avoid tariffs by shifting production to America. It will add more AI server production in Wisconsin and Texas, where the company operates existing campuses, executives have said.
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