Apple Major manufacturing partner Hon Hai Precision Industry reported its slowest monthly sales growth since February, stoking concerns over demand dynamics for AI infrastructure and iPhones.

Hon Hai, also a key server assembly partner of Nvidia, on Tuesday (Nov 5) reported October revenue of NT$804.9 billion (S$33.2 billion), up 8.6 %. Analysts expect the company to increase sales by 15 percent to NT$2.13 trillion in the current quarter. The iPhone assembler’s weak sales growth appears to reinforce Apple’s weak forecast for the holiday quarter.

Hon Hai and other hardware vendors are riding a wave of spending on servers and data centers from big tech companies, including Alphabet’s Meta Platforms and Google. But questions arise about how long this spending will last without a revolutionary AI application to justify the massive investments in infrastructure.

Yet the capital expenditures of the four largest IThe Internet and software companies – Alphabet, Amazon.com, Meta and Microsoft – are expected to reach well over $200 billion this year, a record sum for the group. Executives at each company recently told investors they would continue to spend significant amounts next year. BLOOMBERG