Taiwan’s Foxconn, the world’s largest contract electronics manufacturer, reported a remarkable 91% jump in first-quarter net profit to NT$42.12 billion (about $1.39 billion), surpassing market expectations thanks to strong demand for artificial intelligence (AI) servers. The company’s revenue also hit a record for the quarter, rising 24.2% year-on-year, driven by robust sales of AI servers primarily for clients like NVIDIA and Apple, whose iPhones Foxconn assembles mainly in China.
Despite this strong start to the year, Foxconn issued a more cautious outlook for the full year, forecasting significant but more conservative revenue growth compared to its earlier predictions of strong growth. The company did not provide detailed numerical guidance but highlighted the need to closely monitor evolving global political and economic conditions, especially amid ongoing trade tensions between the U.S. and China.
Foxconn’s major manufacturing presence in China exposes it to risks from tariffs and trade disputes. However, a recent agreement between Washington and Beijing to reduce tariffs for at least 90 days may ease some pressure. Meanwhile, Foxconn is expanding its manufacturing footprint outside China, notably building a large facility in Mexico to produce AI servers for NVIDIA, diversifying its supply chain to mitigate geopolitical risks.
Beyond electronics manufacturing, Foxconn is actively pursuing growth in the electric vehicle (EV) sector. Its subsidiary Foxtron Vehicle Technologies recently signed a memorandum of understanding with Mitsubishi Motors to supply an EV model, and the company has expressed interest in taking a stake in Nissan to strengthen its position in the automotive industry. This strategic move into EVs reflects Foxconn’s aim to tap into a major future growth market.
Foxconn’s shares have faced pressure this year, declining over 11% amid concerns about U.S. trade policies, although they rebounded by 3.2% ahead of the earnings call. The company’s diversification into AI servers and EVs, coupled with its efforts to navigate geopolitical uncertainties, position it for continued adaptation in a rapidly changing global market.
Foxconn’s AI server business is becoming a key growth driver, with AI servers expected to contribute over half of its total server revenue in 2025. The company is also collaborating with Apple to build a large server assembly facility in Houston to support Apple’s AI data centers, highlighting its expanding role and increasing demand in the AI hardware ecosystem. This diversification beyond consumer electronics into cloud and networking products aligns with global trends toward AI and cloud computing infrastructure expansion.
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