Hon Hai Precision Industry Co (鴻海精密) yesterday posted 20 percent quarterly growth in revenue for last quarter, slightly beating its expectations, but the iPhone maker expected revenue to drift into negative territory this quarter due to seasonal weakness.
“Overall operations in the first quarter of 2024 are gradually entering the traditional off-peak season, and seasonal performance is expected to be similar to that of the past three years,” Hon Hai said in a statement yesterday.
Over the past three years, weakness in off-season demand for electronics has driven Hon Hai’s revenue down by between 26 percent and 33 percent in the first three months of the year.
Photo: CNA
On an annual basis the “outlook for the first quarter of this year is expected to decrease,” Hon Hai said, attributing the decrease to a higher comparison base as
factories resumed normal operations following the COVID-19 pandemic in the first quarter of last year.
Hon Hai, based in New Taipei City’s Tucheng District (土城), in November gave a conservative forecast for this year, saying that unfavorable economic conditions and geopolitical tensions would easily offset the meager growth of 5 percent in global electronics demand.
Strong seasonal demand last quarter helped translate market demand into revenue growth of 20 percent sequentially to NT$1.85 trillion (US$59.63 billion), Hon Hai said. On an annual basis, revenue last quarter contracted 5.4 percent, better than market estimates, it said.
Cloud and networking products, servers primarily, unexpectedly registered a “significant” increase in revenue due to a strong rebound in server demand last quarter, Hon Hai said in a statement yesterday.
The company gave a “flattish” outlook for this product category in November as demand was only stabilizing as a result of
improving inventory of
general-purpose servers.
The components and other products segment was the only category of the company’s four major product categories to register revenue growth both quarterly and annually during the final quarter of last year.
The growth was driven by the increasing adoption of components such as those used in vehicles and higher prices, Hon Hai told investors in November.
Last year as a whole, Hon Hai saw revenue dip 6.98 percent year-on-year to NT$6.2 trillion, matching the company’s expectations in November, but slightly better than the market estimate, the company said.
Last year’s revenue was the second-highest in the company’s history, only bettered by the NT$6.62 trillion the company made in 2022.
Electronics companies had a tough year last year as consumers tightened purse strings amid high interest rates, rocketing inflation and geopolitical conflicts.
Hon Hai was no exception, facing sagging consumer demand for smartphones, cloud-enabled devices and PCs.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the