Foxconn, the world’s largest contract electronics maker and a key supplier for Apple, has reported a 6% rise in quarterly net profit, exceeding expectations. This growth was primarily driven by a surge in demand for artificial intelligence (AI) servers. The company remains optimistic about its full-year revenue forecast, expecting significant growth fueled by the continued strong demand for AI servers.
According to Foxconn, the development schedule for Nvidia’s GB200 chip, a leading AI semiconductor, is on track. Product delivery is set to begin in small volumes in the fourth quarter of this year, with volumes expected to increase in early 2025. James Wu, Foxconn’s vice president and spokesman, expressed confidence in the company’s leading position in the AI server market, boasting a global market share of over 40%. He emphasized that Foxconn’s capacity and technology are strong enough to withstand competition in the market.
The Taiwanese company reported a net profit of T$35.05 billion ($1.09 billion) for the April-June quarter, surpassing analysts‘ average estimate. This marks the fourth consecutive quarterly profit increase for Foxconn. AI servers accounted for more than 40% of the company’s server business in the second quarter, with Foxconn projecting that AI servers could soon become its next trillion-dollar revenue product in Taiwan dollar terms.
In addition to its success in the AI server market, Foxconn is looking to replicate its achievements in manufacturing iPhones with its electric vehicles (EV) business. The company revealed ongoing discussions with two traditional car manufacturers in Japan, hinting at potential partnerships to be finalized this year. Foxconn remains cautiously optimistic about its smartphone business outlook for the full year, expecting flat growth due to a higher base in the first half of last year.
Looking ahead, Foxconn anticipates significant revenue growth in the third quarter, driven by new product releases from electronics vendors like Apple ahead of the year-end holiday season. KGI Securities, a Taipei-based firm, has revised up its sales forecast for Foxconn, citing strong demand for new iPhones and AI servers as factors that could support a better-than-expected outlook in the second half of the year.
Overall, Foxconn’s strong performance in the AI server market and its strategic moves in the EV business indicate a promising future for the company. With a solid track record of profitability and a focus on innovation, Foxconn is well-positioned to capitalize on the growing demand for advanced technologies in the global market.