"AI Computing Power Industry Chain Barometer" Foxconn's sales surged 54% in July, and Q3 AI rack shipments are expected to continue growing.

Foxconn's parent company, Hon Hai, announced a 54.2% increase in sales for July, indicating continued strong global demand for AI infrastructure development. Hon Hai stated on Wednesday that sales rose to NT$946.5 billion (approximately US$29.3 billion) in July. Analysts expect an average sales growth of 31.2% for the three months ending in September. As a partner in assembling Nvidia servers, Hon Hai indicated that third-quarter shipments of AI racks are expected to continue to grow, while demand for information and communication technology products is entering a peak season. Hon Hai is widely regarded as the "core weather vane of the AI computing power supply chain," more accurately described as "the most central barometer of AI server and cabinet manufacturing and delivery." This status stems from its pivotal role in global AI infrastructure development: the company is deeply tied to Nvidia's advanced platforms and is the core assembler of AI servers and cabinets for the GB200, GB300, Blackwell, and future Rubin platforms. Hon Hai continues to benefit from global cloud service providers ramping up investments in AI infrastructure. Sales increased by 40% from April to June, exceeding market expectations. Analysts Steven Tseng and Sean Chen stated, "Based on the monthly data disclosed by Hon Hai, its second-quarter sales could reach a record NT$2.5 trillion, growing by 40%, primarily driven by strong demand for AI infrastructure and consumer electronics. The growth in cloud and networking businesses appears most significant, as hyperscale customers continue to expand AI server deployments. Smart consumer electronics performed robustly this quarter, partly due to robust iPhone demand." The four giants in the data center raceAlphabet, Meta, Microsoft, and Amazonhave committed nearly US$2.4 trillion in investments over the next few years. This signals that, despite warnings of overcapacity in the market and ongoing doubts about the commercialization path for AI technology, there will still be substantial investments in AI infrastructure. The biggest debate in the tech industry this year is whether spending hundreds of billions on building AI server clusters will yield returns. Amid lingering concerns, global investors sold off tech stocks in July. Hon Hai's stock price has fallen about 16% from its peak in early June, though it is still up about 12% since the beginning of the year.