Taiwan’s Foxconn, the world’s largest contract electronics manufacturer, reported a 13% decrease in its fourth-quarter net profit, totaling T$46.33 billion ($1.41 billion), falling short of analysts’ expectations of T$54.4 billion. This decline is primarily attributed to underperformance in its consumer electronics division, which overshadowed gains in its artificial intelligence (AI) server segment.
Despite the profit drop, Foxconn experienced a 15.2% increase in fourth-quarter revenue, reaching a record high for that period, driven by robust AI server sales. The company forecasts strong revenue growth in the first quarter, anticipating significant year-over-year increases in consumer electronics and cloud products, although it has not provided specific figures.
Foxconn’s chairman, Young Liu, highlighted the sustained demand from cloud service providers, noting that AI servers are expected to constitute over half of the company’s server revenue this year. To meet this demand, Foxconn is expanding production for clients like Nvidia, both in China and Mexico.
However, the company faces challenges due to escalating global trade tensions, particularly with its significant manufacturing presence in China and Mexico—countries currently dealing with increased U.S. import tariffs. In response, Foxconn is collaborating with Apple to construct a 250,000-square-foot facility in Houston, aiming to assemble servers for data centers that support Apple’s AI initiatives.
Despite these hurdles, Foxconn remains optimistic about its growth prospects, focusing on the burgeoning AI server market to offset weaknesses in other divisions. The company’s strategic partnerships and infrastructure investments are poised to bolster its position in the evolving technology landscape.
