Taiwanese tech giant Foxconn on Thursday (Nov 14) reported a forecast-topping net profit for the third quarter on robust demand for artificial intelligence servers and said it expected 2025 to be the “year of AI”.
The firm, also known by its official name Hon Hai Precision Industry, is the world’s largest contract electronics manufacturer and assembles devices for major tech companies, including Apple’s iPhones.
It has been moving to diversify beyond electronics assembly, pushing into areas ranging from electric vehicles to semiconductors and servers.
Foxconn said net profit for the three months to September hit US$1.5 billion, up 14 per cent from a year ago and beating the NT$45.9 billion (S$1.89 billion) expected by analysts surveyed by Bloomberg.
Revenues for the period rose 20 per cent on-year to NT$1.9 trillion.
The figures represent the fifth consecutive quarter of profit growth for the firm as it rides a wave of demand for generative AI – following the runaway popularity of products such as ChatGPT since it launched two years ago.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Chairman Young Liu said Foxconn’s revenue from AI servers more than doubled in the first three quarters of this year from the same period last year.
Servers now accounted for more than 40 per cent of total revenue, Liu said during an earnings call with analysts.
“Regarding the full-year outlook, we maintain our previous forecast for substantial growth, with visibility further improved compared to August,” Liu said.
But Liu warned “heightened uncertainty in the economic environment and geopolitical factors” could hurt consumer smart products demand in the fourth quarter.
Foxconn has invested significantly to be part of the AI technology market.
In documents released ahead of the earnings call, the company said it expected “rapid growth” in its AI server business in 2025.
AI servers were expected to exceed 50 per cent of total server revenue next year and become a “primary growth driver for the company”, Liu said.
Liu said that “2025 will be the year of AI”, adding that Foxconn was set to “enter another growth phase”.
“We won’t just be an AI supplier but also an AI user,” he said.
“With significant advancements in AI computing power, we are constructing supercomputing centres, positioning ourselves as a major manufacturer with AI supercomputing capabilities.”
The company said last month it was building the world’s largest production plant in Mexico for assembling US hardware leader Nvidia’s GB200 “superchips” that power AI servers.
The bulk of Foxconn’s operations is based in China, and it is the country’s largest private-sector employer with more than a million workers nationwide.
But it is looking to diversify its manufacturing supply chain after production was impacted by three years of strict Covid policies, a bout of industrial unrest and diplomatic tensions with the United States.
US President-elect Donald Trump vowed during his campaign to get tougher on China, promising to impose 60 percent tariffs on all Chinese goods entering the United States.
Liu said Foxconn would wait to see what changes occurred after Trump took office “and then we will quickly make necessary adjustments based on these conditions in our investment direction and pace”.
Last month, Chinese state media reported that Beijing is investigating four Foxconn workers for suspected bribery and embezzlement, after Taiwanese authorities said they had been detained in “strange” circumstances. AFP
