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IPhone Maker Hon Hai’s October Sales Growth Slows on Weak Demand

Apple iPhone 16 and 16 Pro smartphones. Photographer: Victor J. Blue/Bloomberg (Victor J. Blue/Bloomberg)

(Bloomberg) -- Apple Inc.’s major manufacturing partner Hon Hai Precision Industry Co. 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 Corp., on Tuesday reported sales of NT$804.9 billion ($25.2 billion) for October, up 8.6%. Analysts expect the company to grow its sales by 15% 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. 

Read: Nvidia Partner Hon Hai Boosts Capacity to Meet ‘Crazy’ AI Demand

Hon Hai and other hardware suppliers are riding a wave of spending on servers and data centers from big tech firms including Meta Platforms Inc. and Alphabet Inc.’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 Inc., Meta and Microsoft Corp. — are set to climb to well over $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. 

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