Hon Hai Precision Industry Co., the main manufacturer of iPhones and Nvidia Corp.-powered AI servers, cut its guidance for full-year revenue growth to reflect potential fallout from the US trade war.
The Apple Inc. partner indicated that while sales will still grow in 2025, it will be at a slower pace than its prior projection issued in March, based on the presentation slides the company prepared for its post-earnings call on Wednesday.
“The US tariff policy has been evolving swiftly over the past month and leading to not-insignificant impact on the global supply chain,” Hon Hai Chairman Young Liu said on the call. “That together with forex fluctuations have led us to become more cautious about outlook.”
Every NT$1 rise by the Taiwanese currency against the greenback on a yearly average will reduce Hon Hai’s revenue by about 3 per cent, according to Chief Financial Officer David Huang.
The Taiwanese dollar has gained about 8 per cent against the greenback since the beginning of the year, fueled by widespread speculation that local authorities will allow the currency’s appreciation to smooth talks with the Trump administration, which wants to narrow its trade deficit with the island. But the appreciation has led to concerns over the prospects of Taiwanese firms, which form the backbone of the global tech supply chain.
Hon Hai’s moderating growth is another indication that the global electronics industry is affected by US President Donald Trump’s contentious trade policies that center on tariffs on foreign imports.
Earlier this month, Apple projected its sales in the current quarter to grow in the low-to mid-single digit percentage rate, while analysts looked for 5 per cent on average, and warned that tariffs will increase costs this quarter.
Still, Hon Hai’s net income rose to NT$42.1 billion ($1.4 billion) for the first quarter through March, the Taiwanese company said Wednesday. Analysts estimated NT$35.5 billion on average. The company, also known as Foxconn, had previously reported a 24 per cent sales increase for the period.
The manufacturer is benefiting as demand rises for products such as AI server computers, especially as companies hasten orders ahead of US-imposed tariffs.
Sales for April surged 26 per cent, the company said earlier this month, contributing to Hon Hai’s highest-ever total for the first four months of the year on “strong pull-in momentum” for things like artificial intelligence products.
The world’s biggest contract manufacturer is also increasing its investments in the US to mitigate geopolitical risks such as the impact of further tariffs.
What Bloomberg Intelligence Says
Taiwanese EMS/ODM companies like Hon Hai and Quanta could see their thin gross margins compress on the Taiwan dollar’s record appreciation — of nearly 10% over the past month — given their high revenue exposure to the greenback. Yet a product-mix shift — such as growing AI server revenue this year — could help mitigate negative forex impact.
-Steven Tseng and Sean Chen, analysts
Nvidia said last month it will ramp up production of supercomputers in plants in Texas. It said it plans to produce up to half a trillion dollars of AI infrastructure in the US in the next four years in partnership with Hon Hai, Taiwan Semiconductor Manufacturing Co., and others.
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Published on May 14, 2025
