AsianFin -- Foxconn is predicting a strong third quarter on surging demand for artificial intelligence (AI) servers, after the world’s largest contract electronics maker posted forecast-beating earnings for the April–June period.
The Taiwan-headquartered company, formally known as Hon Hai Precision Industry, said Thursday that it anticipated significant year-on-year revenue growth in the current quarter, with AI server revenue projected to jump more than 170%. That growth, it cautioned, could face headwinds from U.S. tariffs and currency fluctuations.
Net profit for the second quarter rose 27% to T$44.4 billion ($1.48 billion), topping the T$38.8 billion average forecast in an LSEG poll. The performance was powered by Foxconn’s cloud and networking segment, which includes AI servers, overtaking smartphones and other smart consumer electronics as its largest revenue contributor for the first time.
“AI has been the primary growth driver so far this year,” said Kathy Yang, Foxconn’s rotating CEO, in a call with analysts and media. She added that the company would closely monitor “the impact of changes in tariffs and exchange rates.”
Foxconn, a key assembler of Apple’s iPhones and the biggest server manufacturer for Nvidia, has been riding a wave of data center investment from Amazon, Microsoft, and Google as they race to expand AI infrastructure. The company expects server sales to rise further in the third quarter, while smart consumer electronics revenue will likely dip after a tariff-driven surge in iPhone shipments in the June quarter.
Capital expenditure will rise more than 20% this year, Foxconn said, as it ramps up server production capacity in Texas and Wisconsin. It is also diversifying geographically, with most U.S.-bound iPhones now assembled in India, and new server production lines under construction in Mexico and Texas.
The company has also restructured its electric vehicle ambitions. Earlier this month, it agreed to sell a former Lordstown, Ohio, car plant — purchased in 2022 for EV production — to partner SoftBank for $375 million, including machinery. Foxconn will continue occupying the site, which will now be used to make cloud-network products for the U.S. market. Production of its Model C EV for the U.S. will start in Taiwan before expanding.
Foxconn shares have risen 8.4% this year, outpacing the broader Taiwan market’s 5.2% gain. The stock closed up 0.5% on Thursday ahead of the earnings announcement.
