Foxconn Reports Positive Financial Outlook Driven by AI Server Demand and iPhone Shipments

by Giorgi Kostiuk

2 years ago

Made with AI

Foxconn's Financial Growth
Plans for AI Factories
iPhone Shipment Rebound and Global Smartphone Demand Increase

Foxconn Technology Group, Apple's main contract manufacturing partner, has announced a positive financial outlook for the current quarter and the remainder of the year. The Taiwan-based company, formally known as Hon Hai Precision Industry, said it had posted strong profit growth in the June quarter.

Foxconn's Financial Growth

Foxconn's profit growth is attributed to the higher demand for servers used in artificial intelligence applications. The company's net income for the June quarter was NT$35 billion, in line with market expectations. Sales revenue for the same period reached NT$1.55 trillion, up 19% from the same period last year. This was mainly due to increased shipments of servers to data center operators that use Nvidia’s AI accelerators.

Plans for AI Factories

The company plans to achieve a 40% global market share of artificial intelligence servers. This strategy is based on the existing cooperation with key IT vendors and the company's manufacturing capacity. Foxconn's investment in AI technology has led to a nearly 80% rise in its share prices this year. The company plans to construct 'AI factories' incorporating Nvidia chips and software.

Sales of AI servers could be a major growth factor for Foxconn because of its good relationship with Nvidia.Cecilia Chan, Bloomberg Intelligence

iPhone Shipment Rebound and Global Smartphone Demand Increase

Recent statistics show that iPhone shipments in China have rallied from the previous fall. There has also been a significant increase in the global market for smartphones due to rising consumer electronics demand and the integration of AI features in devices. Foxconn's July sales were up 22%, primarily due to AI server sales. The company's recent report indicates that almost all business segments have shown an upward trend in the current quarter. Cloud, networking, and components are expected to be growth drivers, while the smart electronics segment, including iPhones, is expected to remain steady for the year.

Foxconn also indicated that Nvidia's leading AI semiconductor chip, the GB200, is on track and will begin shipment in the fourth quarter in small quantities, increasing significantly in early 2025.

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