...June 26, 2024 Robust AI-related demand could support growth. Our base case for Hon Hai Precision Industry Co. Ltd. indicates low-single-digit sales growth in 2024, after a 7% drop in 2023. Strong demand for AI technologies will drive growth and offset the weak recovery in smartphone and PC demand. Hon Hai is well placed to capture robust AI server demand, given its superior ability to offer full solutions from key components to final assembly, good engineering expertise, globally diversified production footprint, and solid partnership with leading cloud service providers. Apple Inc.'s supplier diversification and weaker iPhone sales could constrain growth. Hon Hai will remain highly dependent on Apple for revenue over the next one to two years, despite likely rapid growth in AI-related revenue. Apple accounted for about 58.5% of Hon Hai's revenue in 2023 and could increase its allocations to competing suppliers to buffer against rising geopolitical tension. Nonetheless, Hon Hai could leverage...
