Hon Hai to direct 2026 capital expenditure toward global AI expansion
Taiwan-based Hon Hai Precision Industry Co. announced that its capital expenditure for 2026 will focus on expanding artificial intelligence production, while allocating funds to strengthen global research and development as well as manufacturing operations, particularly in the United States, according to a news report by Focus Taiwan.
Hon Hai Precision Industry Co., a Taiwan-based firm, has announced that its planned capital expenditure for 2026 will primarily focus on expanding artificial intelligence production. The funds will also be allocated to bolster global research and development efforts and manufacturing operations, particularly in the United States. This was revealed during a recent investor conference by Hon Hai's rotating chief executive officer, Michael Chiang.
Chiang reiterated the company's ambitious target of over 30% capital expenditure growth for 2026. The company's capital expenditure in 2025 was NT$173.8 billion (USD 5.39 billion), a NT$37.4 billion (USD 1.28 billion) increase from the previous year. In the first half of 2026, the capital expenditure reached NT$80.9 billion (USD 2.77 billion), marking a NT$3.7 billion (USD 126.8 million) increase compared to the same period in the previous year.
Next-generation AI racks are set to enter mass production in the third quarter of 2026, with shipments expected to commence in the fourth quarter. These new AI racks are anticipated to become Hon Hai's core AI product globally, known as Foxconn, by 2027. Chiang further stated that the capital expenditure will also strengthen the company's global manufacturing and automation capabilities in Taiwan, the United States, Mexico, and Vietnam.
The executive highlighted the U.S. market, emphasizing that Hon Hai will continue to expand its R&D and production capabilities in its production campuses located in Texas, Wisconsin, Ohio, and California to cater to American clients. This decision is aimed at meeting the growing requirements of American clients and driving future sales, profits, and cash flows.
Currently, Hon Hai holds an over 40% share of the global AI server market and aims to raise that figure to 50%. The firm anticipates strong growth in its cloud and networking division, driven by AI applications, as well as a sharp increase in sales for its smart consumer electronics division as it enters a traditional peak season.
In the semiconductor sector, Hon Hai's eight-inch fabrication facility in Japan has been operating at an 90% utilization rate, focusing on key technologies such as silicon carbide, automotive microcontrollers, and AI power chips. Additionally, the company plans to deliver vehicles based on the Model B platform to New Zealand and Austria by the end of the year. Following the launch of the Cavira SUV series in Taiwan in July, deliveries of the Cavira SUV are also expected soon.
Written by urgent.news from Economic Times Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
