NEW TAIPEI, Taiwan - Foxconn, formally known as Hon Hai Precision Industry, said it is highly confident about its growth trajectory as demand for artificial intelligence products surges. Chairman Young Liu made the remarks on Friday at the company's annual shareholders meeting in New Taipei.
Liu pointed to the scale of investment by major cloud service providers as a core market driver, saying their capital expenditure has already surpassed $700 billion this year and could potentially reach $1 trillion next year. "This gives us immense confidence in our future growth momentum," he said.
The firm, which is Nvidia's largest server manufacturer and the principal assembler of Apple's iPhone, disclosed this month that its first-quarter profit rose 19% compared with the same period a year earlier. The company said the earnings beat expectations, attributing the stronger result to robust global demand for AI-related products.
In response to that demand, Hon Hai said it plans to expand manufacturing capacity for AI servers and expects its own capital expenditures to increase by 30% this year from last year's T$174 billion, equivalent to $5.55 billion under the exchange rate cited by the company.
The stock has gained 19% so far this year, a rise that has lagged the broader Taiwan index, which is up 54% over the same period. The exchange rate used in the company's disclosures was $1 = 31.3720 Taiwan dollars.
The comments and financial updates underscore Hon Hai's positioning in the supply chain for AI infrastructure and premium consumer devices, and signal a strategic tilt toward capacity build-out to capture cloud providers' capital spending on servers.
Context and implications
The company framed the large-scale capital expenditure by cloud providers as its addressable market and said the move to increase its own capex is intended to support the production of AI servers. The 30% increase in Hon Hai's planned capital spending is anchored to last year's T$174 billion level and is aimed at expanding manufacturing capability.
Investors have reacted positively but the company's share performance has trailed the broader Taiwan index year-to-date. The firm highlighted the connection between cloud capex and its future revenue potential as the basis for its confidence.