Foxconn sees robust AI demand continuing after Q2 profit tops forecast

Time of India

2 days ago

Foxconn
expects higher third-quarter revenue, it said on Thursday, on robust demand for artificial intelligence servers, which helped the world's largest contract electronics maker report a forecast-beating 27 per cent increase in second-quarter profit.
Foxconn said it should see significant year-on-year
revenue growth
in the third quarter, with AI server revenue expected to leap more than 170 per cent year-on-year.
Nvidia
's biggest server maker and Apple's top iPhone assembler has been riding a data centre boom, as
cloud computing
firms such as Amazon, Microsoft and Alphabet's Google spend billions of dollars to expand their AI infrastructure and research capacity.
That boom helped Foxconn's revenue from its cloud and networking business, which includes
AI servers
, exceed that from smart consumer electronics - such as iPhones - for the first time ever in the second quarter.
Yet, global trade uncertainty could dim the prospects for its outlook this year, as it has a major manufacturing presence in China, though Washington and Beijing this week extended a tariff truce for another 90 days.
Most of the iPhones Foxconn makes for Apple are assembled in China, but the bulk of those sold in the United States are now produced in India. The company is also building factories in Mexico and Texas to make AI servers for Nvidia.
Foxconn has also been looking to expand its footprint in
electric vehicles
, which the company sees as a major future growth generator, though that has not always gone smoothly.
Earlier this month, Foxconn said it had struck a deal to sell a former car factory at Lordstown, Ohio, for $375 million, including its machinery, that it purchased in 2022 to manufacture EVs.
However, it will continue to occupy the facility. The company said in its earnings call with analysts and media on Thursday the Ohio plant would be used to manufacture cloud-related products.
Foxconn has also expanded beyond its traditional role as an iPhone assembler into other areas too. Last month it formed a strategic partnership with industrial motor maker TECO Electric & Machinery to build data centres.
Net profit for the April-June period was T$44.4 billion ($1.48 billion), higher than the consensus estimate of T$38.8 billion compiled by LSEG, the company said.
Foxconn, formally called Hon Hai Precision Industry, last month reported record second-quarter revenue on strong demand for AI products but cautioned about geopolitical and exchange rate headwinds.
For its full-year revenue, it forecast significant year-on-year growth, in line with previous guidance given in May. It did not elaborate and the company does not provide numerical guidance.
Foxconn's shares have risen 8.4 per cent so far this year, outperforming the broader Taiwan index's 5.2 per cent gain.
Its shares closed up 0.5 per cent on Thursday ahead of the earnings release.