TAIWAN-TECHNOLOGY
Foxconn Chairman Liu Yangwei attended an investor conference on the 12th, announcing that the third quarter profit hit a record high. He also stated that with the continued growth in demand for AI, cloud and network products are expected to account for more than 60% of revenue in the next 3 to 5 years.

Taiwan electronics manufacturer Hon Hai Precision Industry (Hon Hai) on the 12th reported third-quarter results for 2026, posting record net income attributable to owners of the parent of NT$77.52 billion, up 34% from a year earlier. The result was driven by increased global investment in artificial intelligence (AI) infrastructure and growth in shipments of AI servers and server racks. Chairman Young Liu said cloud and networking products are expected to account for more than 60% of revenue over the next three to five years.

According to Central News Agency, consolidated revenue for the quarter totaled NT$3.02 trillion, up 46% year on year and 19% from the previous quarter. Earnings per share rose to NT$5.51, compared with NT$4.15 a year earlier and NT$4.27 in the second quarter.

Cloud and networking products accounted for 54% of total revenue in the third quarter, up from 51% in the second quarter. Smart consumer electronics, computing products and components contributed 29%, 12% and 5%, respectively.

Speaking at an investor conference, Liu said demand for AI applications is expected to remain strong and could even outstrip supply. As a result, cloud and networking products are likely to make up an increasing share of Hon Hai’s revenue. He expects their share to exceed 60% over the next three to five years.

Liu also said major cloud service providers have committed to increasing capital expenditure on AI infrastructure, and Hon Hai expects to continue benefiting from that investment in 2027. He forecast high-double-digit growth in AI server rack shipments in the fourth quarter, which would support the company’s profitability, with the growth momentum expected to continue into 2027.

Hon Hai cautioned, however, that supplies of wafers, memory and other key components could remain tight this year. The shortages are expected to ease gradually as manufacturers expand capacity. Liu added that the company would closely monitor changes in US AI policy, particularly potential policy restrictions affecting the construction of AI data centers.

In semiconductors, Hon Hai is working with cloud service provider customers to develop custom application-specific integrated circuits (ASICs) tailored to different AI computing needs. Liu expects growth in the ASIC business to accelerate gradually as demand for AI inference rises and AI agent applications become more widespread.

Hon Hai’s results reflect the continued contribution of AI servers and data center construction to the growth of Taiwan’s electronics manufacturing sector. They also show that the company’s revenue mix is gradually shifting away from traditional consumer electronics assembly toward cloud computing, networking equipment and AI infrastructure.