Robert Way/iStock Editorial via Getty Images
Foxconn Technology (OTCPK:FXCOF) expects “significant” growth in 2024 driven by demand for AI servers, after fourth quarter results beat estimates.
The Apple (AAPL) supplier — which is formally known as Hon Hai Precision (OTCPK:HNHAF) (OTCPK:HNHPF) — said net profit grew 33% year-over-year to NT$53.15B (about $1.69B). The number surpassed analysts’ estimate of NT$43.8B, according to a report by Bloomberg News.
Fourth quarter revenue fell 6% year-over-year to NT$1.852T.
The outlook for 2024 has become more positive since Hon Hai’s Chairman and CEO Young Liu said in November 2023 that their view on this year’s outlook was neutral.
The company said that due to the increase in generative AI applications, the visibility on AI servers has become very high, prompting an upward revision of their outlook to “significant” growth from the original neutral view.
For the AI server segment, Liu noted that the annual growth in GPU modules will more than double this year, while revenue from the AI server business is anticipated to exceed 40% on-year and account for over 40% of total server business.
In terms of AI applications, Liu said that besides CSP [communications service providers] customers, brand customers have also started to actively develop AI servers. These are the company’s existing customers, so their development of AI, along with stabilization from general servers, will benefit the group’s performance.
However, Foxconn expects inventory digestion in networking products to have a slight impact on growth momentum in the first half of 2024. But, seeing the entire cloud and networking products segment this year, the company believes strong growth is still achievable.
For the first quarter of 2024, the company expects revenue to decrease year-over-year, Foxconn had said earlier in the month.
For the full year 2023, revenue dipped 7% year-over-year to NT$6.162T, however, net profit rose 0.4% to NT$142.1B for the same period.