AI demand expected to boost electronics giant Foxconn's second-quarter profit
TAIPEI:
Taiwan
's
Foxconn
, the world's largest contract electronics maker, is expected to report on Thursday that second-quarter profit rose 11% on continued strong demand for artificial intelligence servers.
Net profit for April-June for Apple's top iPhone assembler and Nvidia's server maker likely came in at T$38.8 billion ($1.30 billion), up from T$35.05 billion a year earlier, according to LSEG's consensus estimate.
Foxconn, formally called Hon H
ai
Precision Industry, last month reported record second-quarter revenue on strong demand for AI products but cautioned about geopolitical and exchange rate headwinds.
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.
In its July sales report, Foxconn said while the third quarter should see on-year growth - the company does not provide numerical guidance - the impact of "evolving global political and economic conditions" would need continued close monitoring.
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, but said it would continue to use the site to make a broader range of products aligned with its strategic priorities.
Foxconn has expanded beyond its traditional role as an iPhone assembler in other areas too. Last month it formed a strategic partnership with industrial motor maker TECO Electric & Machinery to build data centres.
Foxconn holds its earnings call at 3 p.m. (0700 GMT) in Taipei on Thursday, where it will also update its outlook for the year.
Foxconn's shares have risen 7.9% so far this year, outperforming the broader Taiwan index's 5.8% gain.
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