The Taiwanese technology giant posted impressive second-quarter growth figures on Thursday, led by growth in its AI server business.
Foxconn has reported a 27% rise in second-quarter profit thanks to strong demand for its artificial intelligence (AI) servers. The Taiwanese technology giant beat market expectations, before projecting third-quarter AI server sales to grow by more than 170% year-on-year.
For the first time, its cloud and networking business generated more revenue (41%) than its smart consumer electronics segment (35%). This shift reflects a growing reliance on AI technology, which continues against the backdrop of complex US-China trade relations.
The firm reported second-quarter earnings of NT$44.36 billion ($1.48 billion). This came in above the NT$38.8-billion consensus estimate compiled by LSEG. Second-quarter revenue climbed 16% to NT$1.79 trillion, matching forecasts from analysts.
Foxconn is currently the world’s largest contract electronics maker and the main assembler of Apple iPhones. Formally known as Hon Hai Precision Industry, the company is a key manufacturing partner for Nvidia. It manufactures server racks designed for AI workloads and data centres.
Foxconn outlines future production plans
To meet growing demand, Foxconn bosses have set out plans to increase capital spending by more than 20% in 2025. It is also due to expand its AI server production at facilities in Texas, Wisconsin, and Mexico while also diversifying iPhone manufacturing into India.
While the majority of the iPhones produced by Foxconn are assembled in China, the bulk of those sold in the US are now produced in India. The company made this shift in response to earlier tariff threats. Taiwan has already been hit with a temporary 20% tariff, with trade negotiations still ongoing between Washington and Taipei.
Renewed focus on electric vehicle production
Foxconn has also been looking to expand into electric vehicle production, which the company sees as a major future growth generator. Despite this, the company struck a deal to sell a former car factory at Lordstown, Ohio, which featured its machinery.
It raised $375 million from the sale of the facility, which it purchased back in 2022 to manufacture EVs. The company confirmed it will continue to occupy the plant but would instead use it to develop cloud-related products.
Rotating CEO Kathy Yang said the Ohio facility will help meet US market demand for AI computing power. Initial production of the Model C electric vehicle will take place in Taiwan, but US market plans remain in place.
Shares in Foxconn have increased 8.4% in Taiwan so far this year, outperforming the broader market. Its US-listed shares are up nearly 18% over the same period, supported by bullish retail investor sentiment.
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