Taiwanese manufacturer Hon Hai Precision Industry Co., also known as Foxconn, expects cloud and networking to account for more than 60% of revenue within three to five years, as AI infrastructure demand reshapes its business mix.
Chairman Young Liu made the forecast at an investor conference Thursday, Focus Taiwan reported. He attributed the expected shift to a persistent gap between demand for AI applications and what suppliers can provide.
Cloud and networking generated 54% of Hon Hai's revenue in the third quarter, compared with 51% in the second. Hon Hai released its results ahead of the conference and reported record quarterly net profit. EconoTimes previously covered the company's record profit and sales mix.
Liu said major cloud companies' plans to commit more resources to AI infrastructure should help Hon Hai benefit from demand in 2027. Liu expects fourth-quarter AI rack shipments to post high double-digit growth, with a similar pace carrying into 2027. He also said the company is broadening its product lineup and combining hardware and software capabilities as it seeks to expand its market share.
Liu expects wafers, memory chips and other important parts to remain difficult to secure this year. He said pressure should ease over time as suppliers pursue capacity additions. Component constraints have had a limited effect on Hon Hai's smart consumer electronics business, he said, because its customers mainly sell high-end models. For that category, Liu expects shipments to hold steady next year as customers bring more premium devices to market.
Liu also plans to track U.S. AI policy. After Democrats won control of the Senate and House in the midterm elections, he said he would watch policy developments, citing concern about possible restrictions on AI data center development. Hon Hai is working with cloud customers to develop application-specific integrated circuits (ASICs), chips designed for particular uses. Liu said ASIC growth should accelerate as AI inference needs increase and AI agents gain wider use. Hon Hai's event calendar lists its unaudited November revenue release for Dec. 5.