Foxconn, the world’s largest contract electronics manufacturer, reported a significant 91% increase in its first-quarter profit, driven by strong demand for artificial intelligence (AI) servers. The company’s net profit for the January-March period reached T$42.12 billion (US$1.39 billion), surpassing the T$37.8 billion average forecast by 13 analysts surveyed by LSEG. This marked a remarkable performance for the company, which is known for assembling Apple’s iPhones and making servers for Nvidia.
In its earnings report, Foxconn revealed that its revenue for the first quarter surged by 24.2%, setting a new record for that period. The company credited the growth to robust sales of AI servers, a sector that has seen increased investment as demand for AI-powered technologies continues to rise. Foxconn also projected significant growth in the second quarter, with high double-digit year-on-year growth for AI servers and an accelerated production ramp-up.
However, despite the strong performance in the first quarter, Foxconn’s full-year outlook was more cautious. The company expects to see significant growth compared to last year but downgraded its previous forecast of “strong” growth. While the company refrained from providing specific revenue figures, this tempered forecast was attributed to global uncertainties, particularly the ongoing US-China trade tensions.
The company has a significant manufacturing presence in China, and while recent trade negotiations between Washington and Beijing have resulted in a temporary reduction of tariffs, Foxconn’s exposure to geopolitical risks remains a concern. The potential impact of the trade dispute could affect the company’s outlook for the remainder of the year, as both the US and China continue to navigate complex economic and trade relations.
While the immediate outlook for Foxconn’s AI server business remains positive, with continued demand expected in the second quarter, the company’s cautious stance on the full-year forecast highlights the challenges posed by global trade tensions and their potential impact on its diversified manufacturing operations.
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