Taiwanese electronics contract manufacturer Foxconn’s net profit fell 12.3 percent to 46.33 billion Taiwan dollars in the final quarter of last year. It was the first decline since the second quarter of 2023 and was partly driven by losses in non-operating business segments. But operating and gross profit grew and the company expects strong sales in the first quarter, according to a statement today.
Foxconn’s Profit Surges Amid AI Server Boom
Analysts polled by LSEG were expecting a profit of TWD54.4 billion. Gross profit rose 15.7 percent and operating profit 31.8 percent. Back in January, the firm said its October-December sales rose 15.2 percent to a record thanks to strong sales of artificial intelligence (AI) servers.
Foxconn, also known as Hon Hai Precision Industry, is the world’s largest contract electronics manufacturer. It is best known as the largest maker of iPhones for US firm Apple. The company is now capitalising on the burgeoning interest in artificial intelligence, assembling servers that are used to perform AI-related computational tasks.
Trade Risks
Foxconn said it expects strong revenue growth from consumer electronics in the first quarter. However, cloud and networking product sales are also expected to increase strongly. The upbeat forecast contrasts with cautious statements from a number of other companies concerned about US President Donald Trump’s turbulent trade policies. It also shows that the boom in demand for artificial intelligence is not over yet, further boosting hardware sales, Reuters wrote. The company said there are rumours that demand from cloud service providers will peak this year and go down next year. But the company has not yet seen demand start to slow.
AI-enabled servers will account for more than half of its total server sales this year, according to Foxconn. Foxconn is expanding production for Nvidia. But Foxconn has a significant manufacturing presence in China and Mexico, two of the U.S.’s biggest trading partners, which are now facing increased import tariffs. Most iPhones for Apple are assembled in China. Foxconn is also building a large AI server manufacturing plant in Mexico for Nvidia. Apple said last month that it would partner with Foxconn to build a plant in Houston to assemble servers for Apple’s AI-powered data centers.
Source: Reuters
