Taiwan’s Foxconn, the world’s largest contract electronics manufacturer and Apple’s primary iPhone assembler, reported better-than-expected quarterly revenue, driven by high demand for AI servers. The company, also known as Hon Hai Precision Industry Co Ltd, anticipates continued growth in the current quarter.
The third quarter typically marks the beginning of a crucial period for Taiwan’s tech firms, as they ramp up production of smartphones, tablets, and other electronics for major vendors like Apple, targeting Western markets’ year-end holiday season. Foxconn is capitalizing on this seasonal surge, bolstered by strong demand for servers supporting artificial intelligence (AI) applications. Notably, its clientele includes prominent AI company Nvidia.
Foxconn announced that it expects revenue growth both year-on-year and compared to the previous quarter for Q3. “Entering the peak season of the second half of the year, we anticipate our operation to gradually gain momentum,” the company stated, although it did not provide specific numerical forecasts.
In June, Foxconn’s revenue reached T$490.7 billion ($15.12 billion), marking a 16.1% increase year-on-year and the second-highest level for this period. For the second quarter, revenue soared 19.1% year-on-year to T$1.55 trillion, surpassing the T$1.51 trillion forecasted by LSEG SmartEstimate. This figure represents a record high for the second quarter.
The significant revenue increase was primarily driven by the cloud and networking products segment, which showed strong growth year-on-year and quarter-on-quarter, benefiting from robust AI server demand. However, revenue from smart consumer electronics products, including smartphones, remained flat compared to the previous year, with Foxconn not providing further details.
Despite the flat performance in the consumer electronics segment, Foxconn’s overall strong revenue growth underscores its strategic pivot towards AI-related products. The company’s shares have surged 105% this year, outperforming the broader Taiwan market, which saw a 31% increase.
As Foxconn continues to leverage the growing AI market and prepares for the busy holiday season, it remains well-positioned to maintain its revenue growth trajectory. The company’s performance highlights the increasing importance of AI applications in driving technological advancements and market demand.
Foxconn’s proactive approach in meeting the rising demand for AI servers and its robust operational strategies ensure its continued success in the competitive electronics manufacturing industry. With the upcoming peak season, Foxconn is set to further capitalize on its strengths and achieve sustained growth.
READ MORE: