Foxconn Projects Strong Revenue Growth Amid Rising AI Demand

Taiwan-based Foxconn, the world’s leading contract electronics manufacturer, has forecast robust revenue growth for the first quarter, driven by sustained demand from its technology clients. This positive outlook contrasts with the caution exhibited by many businesses affected by shifting trade policies under the U.S. administration. The company’s projections highlight the continued surge in artificial intelligence-driven hardware sales.

Speaking during a conference call, Foxconn Chairman Young Liu dismissed speculation that demand from cloud service providers (CSPs) might peak this year and decline thereafter. He emphasized that Foxconn has observed no slowdown in CSP demand and expects AI server revenue to more than double quarter-over-quarter and year-over-year in the first quarter. AI servers are anticipated to contribute to over half of the company’s total server revenue this year, as production expands for Nvidia.

Despite this optimistic forecast, Foxconn reported a net profit of T$46.33 billion ($1.41 billion) for the October-December period, which fell short of analysts’ average estimate of T$54.4 billion. The 13% decline in profit compared to the previous year was primarily attributed to investment losses in Japan’s Sharp and currency exchange fluctuations. However, the company’s revenue during the same period surged by 15.2% to set a quarterly record, largely due to strong AI server sales.

Foxconn expects significant revenue growth from consumer electronics in the first quarter, along with strong sales from cloud and networking products, though it did not disclose specific figures. Analysts estimate the company’s first-quarter net profit to reach T$43.56 billion, nearly doubling from the previous year.

As a key manufacturing partner for Apple, Foxconn continues to expand its global production footprint. Most of its iPhones are assembled in China, but the company is also building a large manufacturing facility in Mexico to produce AI servers for Nvidia. Additionally, Apple has partnered with Foxconn to develop a 250,000-square-foot facility in Houston to assemble servers for its data centers.

Liu acknowledged the potential challenges posed by shifting U.S. trade policies, particularly regarding tariffs on goods from China and Mexico. However, he expressed confidence in Foxconn’s ability to adapt, citing its strategic efforts over the years to strengthen supply chain resilience and establish production bases in the United States.

While the future impact of U.S. trade policies remains uncertain, Foxconn remains committed to expanding its global operations and maintaining its leadership in AI-driven hardware manufacturing.

 

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