Hon Hai Precision Industry Co. reported a significant increase in first-quarter sales, driven by strong data center demand for artificial intelligence technology. The company, a key supplier for Nvidia Corp. and Apple Inc., experienced a 24.2% revenue growth in the first three months of 2025, reaching NT$1.64 trillion ($49.8 billion).

The surge in sales was primarily attributed to the rising need for AI servers to support computing needs by tech giants like Alphabet Inc. and Amazon.com Inc. Hon Hai expects continued growth in its cloud and networking products segment in the second quarter, but remains cautious due to uncertainties in global political and economic conditions.

Concerns over price competition in the AI sector have been raised by the emergence of more affordable AI models like that of Chinese startup DeepSeek. Additionally, fears of a global economic slowdown exacerbated by recent tariffs imposed by US President Donald Trump have impacted the sector.

Companies like Microsoft Corp. have scaled back projects worldwide, while Hon Hai faces direct impacts from the tariffs imposed by the Trump administration on Chinese and Vietnamese imports. Analysts anticipate significant challenges for the tech industry, particularly smartphone, PC, and server manufacturers, estimating a potential $100 billion impact on the global tech sector due to reciprocal tariffs.