Hon Hai AI Server Revenue Poised for Majority Share and Potential $1.4 Billion Surge
24 March 2025 路 Uncategorized 路
Source: 路 https://finance.technews.tw/2025/03/14/hh-ai-server-3/
Today, Hon Hai held its online earnings conference for Q4 2024 and released financial reports. The company achieved a record net profit of NT$152.7 billion in fiscal year (FY) 2024, with an Earnings Per Share (EPS) reaching NT$11.01鈥攖he highest since 2008. Hon Hai also announced it will distribute cash dividends at the rate of NT$5.8 per share this year, a record high for the company's listing in 1991.
Despite global tariff policies, geopolitical risks, and monetary policy changes, Hon Hai anticipates strong growth throughout FY2025. During the conference, leadership highlighted key development focuses across three platforms: AI, electric vehicles (EV), and cloud computing services.
In FY24, revenue reached NT$686 billion鈥攁n 11.3% increase from last year; gross profit was at NT$429 billion (up by 10.6%), operating income stood at NT$201 billion (a rise of 20.5%), and net profits amounted to NT$153 billion, up by 7.5%. The company鈥檚 gross profit rate, operating profit ratio, and net profit ratio were recorded as 6.25%, 2.92%, and 2.23% respectively鈥攃ompared with last year's figures of 6.30%, 2.70%, and 2.31%. This improved core profitability resulted in an EPS reaching NT$11.01, a growth of NT$0.76 from the previous fiscal period.
In Q4 alone, revenue reached NT$213 billion with a year-on-year increase of 15%; gross profit was at NT$131 billion (up by 15.7%), operating income stood at NT$65 billion (a rise of 31.8%) and net profits amounted to NT$46 billion, down from last year's figure by -12.8%. The margin ratios for gross profit rate, operating profit ratio, and net profit ratio were respectively recorded as 6.15%, 3.03% and 2.17%; compared with the previous quarter鈥檚 figures of 6.12%, 2.64%, and 2.87%. While core profitability improved, EPS reached NT$3.34鈥攁 decrease of -NT$0.49 from last year.
Regarding AI servers, which have experienced significant demand in recent years, Chairman Liu Yangwei stated that the global need for infrastructure supporting artificial intelligence computing power remains strong and major Cloud Service Providers (CSPs) are expected to maintain robust capital expenditure this year. For Q1 alone, Hon Hai anticipates a 100% or greater increase both quarter-on-quarter and year-over-year in AI server revenue.
Liu Yangwei believes that the first quarter's AI servers will see double-digit growth compared with last quarter as well as over the same period from last year; this year鈥檚 share of AI server revenues is projected to exceed 50% of total server business, potentially surpassing NT$1 trillion in revenue.
Regarding DeepSeek technology, Liu Yangwei emphasized that its adoption will accelerate the popularization of inference-based AI servers and drive overall computing power demand. For large enterprises and CSPs, high-end AI servers along with complete network and storage architectures remain indispensable; therefore, a continuous growth trend for such server demands is expected in the long term.
AI training requires extensive time periods during which any failure can significantly impact or even alter results if an AI server malfunctions. Liu Yangwei stated that Hon Hai has consistently prioritized quality stability assurance and aims to achieve 40% market share鈥攚ith confidence in further increasing this figure.
Regarding collaborations between Hon Hai and Japanese automakers, Liu Yangwei announced plans for signing agreements within one to two months; production of MODEL B is expected to commence by the second half of the year, along with North American versions of MODEL C. Following battery plant facility certification completion in Q3 2024, it will expand Hon Hai鈥檚 electric bus shipment capacity.
(Please note: The source image for the first picture comes from TechNews.)
Despite global tariff policies, geopolitical risks, and monetary policy changes, Hon Hai anticipates strong growth throughout FY2025. During the conference, leadership highlighted key development focuses across three platforms: AI, electric vehicles (EV), and cloud computing services.
In FY24, revenue reached NT$686 billion鈥攁n 11.3% increase from last year; gross profit was at NT$429 billion (up by 10.6%), operating income stood at NT$201 billion (a rise of 20.5%), and net profits amounted to NT$153 billion, up by 7.5%. The company鈥檚 gross profit rate, operating profit ratio, and net profit ratio were recorded as 6.25%, 2.92%, and 2.23% respectively鈥攃ompared with last year's figures of 6.30%, 2.70%, and 2.31%. This improved core profitability resulted in an EPS reaching NT$11.01, a growth of NT$0.76 from the previous fiscal period.
In Q4 alone, revenue reached NT$213 billion with a year-on-year increase of 15%; gross profit was at NT$131 billion (up by 15.7%), operating income stood at NT$65 billion (a rise of 31.8%) and net profits amounted to NT$46 billion, down from last year's figure by -12.8%. The margin ratios for gross profit rate, operating profit ratio, and net profit ratio were respectively recorded as 6.15%, 3.03% and 2.17%; compared with the previous quarter鈥檚 figures of 6.12%, 2.64%, and 2.87%. While core profitability improved, EPS reached NT$3.34鈥攁 decrease of -NT$0.49 from last year.
Regarding AI servers, which have experienced significant demand in recent years, Chairman Liu Yangwei stated that the global need for infrastructure supporting artificial intelligence computing power remains strong and major Cloud Service Providers (CSPs) are expected to maintain robust capital expenditure this year. For Q1 alone, Hon Hai anticipates a 100% or greater increase both quarter-on-quarter and year-over-year in AI server revenue.
Liu Yangwei believes that the first quarter's AI servers will see double-digit growth compared with last quarter as well as over the same period from last year; this year鈥檚 share of AI server revenues is projected to exceed 50% of total server business, potentially surpassing NT$1 trillion in revenue.
Regarding DeepSeek technology, Liu Yangwei emphasized that its adoption will accelerate the popularization of inference-based AI servers and drive overall computing power demand. For large enterprises and CSPs, high-end AI servers along with complete network and storage architectures remain indispensable; therefore, a continuous growth trend for such server demands is expected in the long term.
AI training requires extensive time periods during which any failure can significantly impact or even alter results if an AI server malfunctions. Liu Yangwei stated that Hon Hai has consistently prioritized quality stability assurance and aims to achieve 40% market share鈥攚ith confidence in further increasing this figure.
Regarding collaborations between Hon Hai and Japanese automakers, Liu Yangwei announced plans for signing agreements within one to two months; production of MODEL B is expected to commence by the second half of the year, along with North American versions of MODEL C. Following battery plant facility certification completion in Q3 2024, it will expand Hon Hai鈥檚 electric bus shipment capacity.
(Please note: The source image for the first picture comes from TechNews.)