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Hon Hai Precision Industry Reports 52% Rise in Monthly Sales Driven by Robust AI Server Demand

Hon Hai Precision Industry, a key server assembly partner for Nvidia, reported a 52% increase in monthly sales as demand for AI servers remains strong. This growth continues to provide a dependable pulse for local equity markets, even as investors evaluate whether the AI capital spending boom is becoming a bridge built too far out over the river.

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While valuations are stretched and the trade is crowded, hardware demand has not yet disappeared. Regional markets opened higher this week, with Japan and South Korea showing firmness following a decent tailwind for US technology shares. The Philadelphia Semiconductor Index jumped 3.4%, keeping the AI complex in a leadership position. Meanwhile, the yen gained more than 2% last week as carry trades began to shed passengers and markets anticipated successive Bank of Japan rate increases. In other news, the US payroll report added 162,000 jobs, exceeding expectations and providing ammunition for those favoring a rate hike. Oil prices are pushing higher after a series of tanker attacks in the Strait of Hormuz involving the US and Iran. China plans to inject 300 billion yuan into its largest banks and insurers through special bonds to ease margin pressure and increase lending capacity.

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