HON HAI PRECISION INDUSTRY (+) : Key takeaways from Hon Hai post-results call

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HON HAI PRECISION INDUSTRY (+) : Key takeaways from Hon Hai post-results call

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Key takeaways from Hon Hai post-results call

2Q26 outlook

2Q is a traditional low season for the industry but thanks to strong AI momentum, Hon

Hai will continue to deliver strong q-q and y-y growth into 2Q26, as per management. For

the cloud and networking segment, AI demand remains robust to drive shipments of

servers and switch related products. Management expects AI server rack shipments to

increase by high double-digit q-q in 2Q26. For the smart consumer segment, its key

smartphone product is in the transition period, but overall demand remains stable (flat q-

q). Computer segments should see strong q-q growth due to early pull-in demand for

memory price hikes.

Full year outlook

The overall tone remains largely unchanged from the prior earnings call for a strong 2026,

but order visibility has improved from March. AI remains to be the most important

growth driver for the company, supported by a robust capex outlook from US CSPs. AI

is changing the industry structurally from infrastructure to end applications, creating

plenty of opportunities that Hon Hai is aiming to seize.

AI business update

Hon Hai expects AI rack shipments to be more than double this year and expects high

double-digit q-q growth for AI rack shipments in 2Q26. Networking products are also

triggered by strong AI demand. The company expects 2x growth for 800G+ switches this

year and CPO switches are expected to enter mass production from 3Q26. Hon Hai will

continue to invest in high value-added parts within AI servers (liquid cooling, mechanical

parts, high speed transmission, and power module).

Revenue from cloud and networking was down q-q in 1Q26, because some of the