Jakarta, INTI - A key supplier in the supply chain of Apple Inc.’s iPhone and a major partner for Nvidia chips, Hon Hai Precision Industry Co. reported a 29.7% surge in quarterly sales, highlighting sustained AI-driven demand despite the early weeks of geopolitical tensions in the Middle East.
Revenue for the three months ending in March rose to NT$2.13 trillion (approximately US$66.5 billion or around IDR 1,129 trillion), slightly below analysts’ average estimate of NT$2.14 trillion.
AI Infrastructure Expansion Amid Global Uncertainty
This performance comes amid growing concerns over the rapid expansion of energy-intensive data centers, as escalating tensions in the Middle East continue to disrupt global shipping routes and push up gas prices.
According to analysts at Bloomberg Intelligence, Hon Hai is expected to further strengthen its sales growth this year, driven by increasing shipments of AI server racks. The company’s deep vertical integration and global footprint give it a competitive edge as server complexity rises and demand for localized production increases. Additional upside may come from the growing adoption of ASIC-based server projects, along with the rollout of new platforms such as Vera Rubin in the second half of the year.
The Taiwan-based company had earlier projected strong sales growth for 2026, supported by ongoing AI momentum. However, Chairman Young Liu acknowledged uncertainties in the business environment stemming from geopolitical instability in the Middle East.
The company stated that its current quarter sales are expected to continue growing both quarter-on-quarter and year-on-year, although it remains necessary to monitor the impact of ongoing global political and economic uncertainties.
Strategic Positioning in AI Hardware and Consumer Devices
Hon Hai has positioned itself as a key player in AI hardware by assembling servers equipped with Nvidia accelerators. This comes as major tech companies such as Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., and Microsoft Corp. collectively plan to allocate around US$650 billion in capital expenditures this year, even as concerns about overcapacity and monetization challenges persist.
At the same time, a significant portion of Hon Hai’s revenue continues to come from assembling iPhones and MacBooks for Apple, putting the company in a favorable position amid strong market reception for the latest iPhone 17.
Like many electronics manufacturers, Hon Hai faces increasing pressure on profitability due to a prolonged shortage of memory chips used across smartphones, PCs, and servers. However, company executives indicated that the shortage is unlikely to significantly impact demand for premium devices produced for its key clients.
Conclusion
Hon Hai Precision Industry Co.’s strong quarterly performance underscores the powerful momentum of AI-driven demand across both data center infrastructure and consumer technology. Despite ongoing geopolitical tensions and supply chain challenges, the company’s deep integration within the ecosystems of Apple Inc. and Nvidia positions it to sustain growth. As global tech giants continue to invest heavily in AI infrastructure, Hon Hai is well-placed to capitalize on long-term opportunities while navigating uncertainties in the evolving digital economy.
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