Hon Hai's quarterly profit fell short of expectations, weighed down by weak sales and increased investment in the production of artificial intelligence (AI) servers. As a major assembler of Nvidia servers, the company's profits fell 13% to NT$46.3 billion (US$1.4 billion). In comparison, analysts expected growth of 2.3% to NT$54.4 billion.
Hon Hai's server manufacturing unit has also expanded as demand for Nvidia's AI chips surges. But most of its revenue still comes from iPhones, and sales of Apple's flagship device unexpectedly fell during the holiday season.
While big tech companies from Microsoft to Amazon have pledged to continue spending on data centers, the rise of DeepSeek has raised questions about whether those expenditures are justified. In addition, Hon Hai also faces uncertainty surrounding the Trump administration’s 2025 tariff policy.