It has raised concerns about demand momentum for both AI infrastructure and iPhones
Apple’s major manufacturing partner Hon Hai Precision Industry reported its slowest monthly sales growth since February, stoking concerns about demand momentum for both AI infrastructure and iPhones.
Hon Hai, also a key server assembly partner to Nvidia, on Tuesday (Nov 5) reported sales of NT$804.9 billion (S$33.2 billion) for October, up 8.6 per cent. Analysts expect the company to grow its sales by 15 per cent to NT$2.13 trillion in the current quarter. The iPhone assembler’s tepid sales growth appeared to reinforce Apple’s weak forecast for the holiday quarter.
Hon Hai and other hardware suppliers are riding a wave of spending on servers and data centres from big tech firms, including Meta Platforms and Alphabet’s Google. But questions are bubbling up about how long the spending will last without a killer AI application to justify the large infrastructure investments.
Still, the capital expenditures of the four largest internet and software companies – Alphabet, Amazon.com, Meta and Microsoft – are set to climb to well over US$200 billion this year, a record sum for the group. Executives from each company told investors recently that they will continue to spend large sums next year. BLOOMBERG
