Foxconn projects 30% capex growth in 2026 amid robust AI demand
New Delhi: Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Thursday said it expects its capital expenditure to grow by more than 30 per cent in 2026, driven by sustained demand for artificial intelligence (AI) and cloud-based infrastructure.
The company, globally known as Foxconn, said the increased spending is aimed at strengthening its international manufacturing footprint and enhancing technical capabilities, according to a report by Focus Taiwan.
Speaking at an investor conference, Hon Hai CEO Michael Chiang said the investment would support regional production expansion, automation and improvements in core manufacturing capacity.
The announcement came alongside the release of the company’s first-quarter financial results, which showed a record net profit. Foxconn posted a first-quarter net profit of NT$49.92 billion (USD 1.58 billion), marking a 19 per cent increase year-on-year and a 10 per cent rise from the final quarter of 2025.
The company’s total sales for the quarter stood at NT$2.12 trillion (USD 67.4 billion), with its cloud and networking division contributing 48 per cent of the revenue.
Market data presented during the conference showed that Hon Hai currently holds around 40 per cent of the global AI server market. Chiang said AI servers accounted for more than half of the company’s total server revenue during the first quarter.
He added that shipments of general servers are expected to grow at a double-digit pace, outperforming the broader industry average.
Chiang also reiterated the company’s earlier projection that sales would more than double in 2026, driven by strong growth in AI servers and cloud-based devices.
In the first quarter, Hon Hai’s operating margin stood at 3.57 per cent. Chiang said the operating margin in 2026 is expected to surpass the 3.2 per cent recorded in 2025.
He further said shipments of co-packaged optics (CPO) switches are expected to begin in the third quarter, with volumes likely to reach 10,000 units this year.
According to the report, Hon Hai spokesperson James Wu said shipments of multiple AI solutions are expected to rise quarter-on-quarter this year, while shipments of AI servers embedded with application-specific integrated circuits (ASICs) are likely to double.
The company has also expanded its sovereign AI initiatives by collaborating with infrastructure firm Amin and French government-owned Bull to develop digital infrastructure in Africa.
Echoing Wu’s remarks, Chiang said Hon Hai has partnered with major cloud service providers to develop ASIC-powered AI server racks. He added that the company is also investing in AI server components, including liquid cooling and high-speed transmission solutions.
According to the report, the United States and Mexico will continue to serve as Hon Hai’s major AI server production hubs, as demand from North America remains strong, Chiang said.
(DD News)
