Hon Hai reports record June sales

ELECTRONICS:
Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said

Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom.

The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month.

Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud and networking division benefited from solid global demand for AI applications and cloud services to generate higher sales last month.

Photo: Annabelle Chih, Bloomberg

In addition, its smart consumer electronics division saw significant sales growth, boosted by international brands launching new entertainment devices.

Sales of the company’s electronic component operations last month were little changed from a year earlier, while the computing division suffered a sales decline in the month, Hon Hai said.

Compared with May, the company’s major divisions saw declines in sales last month, attributed to the stronger New Taiwan dollar against the US dollar and reduced momentum from clients in building up inventories, it said.

For the second quarter, Hon Hai reported consolidated sales of NT$1.8 trillion, a 15.82 percent year-on-year increase and a 9.45 percent rise from the first quarter, the company said.

In the first half of this year, consolidated sales reached NT$3.44 trillion, a 19.68 percent increase compared with the same period last year, it said.

This quarter, sales growth momentum is expected to accelerate quarterly and annually, as the information and communication technology industry enters the traditional peak season, Hon Hai said.

Separately, Hon Hai’s industrial computer subsidiary, Ennoconn Corp (樺漢科技), on Friday reported a 7.8 percent year-on-year decline in sales last month, totaling NT$11.35 billion, and a 1.5 percent drop from the previous month.

The company, whose businesses mainly comprise three major units: design and manufacturing, systems integration and brand business, reported a 20.4 percent year-on-year increase in sales within the design and manufacturing segment, reaching NT$2.8 billion, while its branding business saw a 4.6 percent sales growth, totaling NT$5.1 billion.

However, the systems integration segment experienced a significant 32.6 percent decline in sales, falling to NT$3.44 billion, it said in a statement.

Sales in the second quarter were up 0.93 percent from the first quarter, but down 4.2 percent from a year ago, to NT$34.79 billion, mainly due to the appreciation of NT dollar against the greenback, it said.

Sales in the first half of this year were NT$69.25 billion, up 0.3 percent year-on-year, it added.

The company anticipates stronger collaboration with international partners to drive stable growth in the second half of the year. It also plans to enhance its global presence and regional management strategies, it said.

Additional reporting by Meryl Kao