Foxconn (Hon Hai Precision Industry), known as Apple's largest iPhone assembler, rode the artificial intelligence (AI) boom to log second-quarter revenue of 120 trillion won. As Generative AI spread, global Big Tech corporations expanded data center investments, leading not only to demand for Nvidia graphics processing units (GPUs) but also to new growth drivers for server manufacturers that install them. Some said Foxconn, long seen as an Apple partner, is transforming into a key supply chain company in the AI era.
On the 5th local time, Reuters said Foxconn's second-quarter revenue this year was 2.513 trillion Taiwan dollars (about 120 trillion won), up 39.8% from a year earlier. That beat the market forecast of 2.372 trillion Taiwan dollars compiled by U.K. financial information firm LSEG. Revenue in June also reached 821.8 billion Taiwan dollars (about 39.3 trillion won), up 52.1% from a year earlier, marking the highest for June on record.
The driver of Foxconn's growth was its AI server business. Foxconn is the world's largest electronics manufacturing services (EMS) provider and Apple's largest iPhone assembler. It is also cited as a key server manufacturing partner for Nvidia. Until now, Foxconn grew on iPhone production. Apple's product cycles and smartphone market trends were influential enough to sway Foxconn's revenue. But as competition in Generative AI has intensified recently, "AI servers" have emerged as a new growth axis.
On top of that, as global Big Tech corporations such as Microsoft (MS), Amazon and Google ramp up AI infrastructure investments, demand for AI servers is rising quickly. Foxconn said increasing demand for AI-related products translated into higher revenue in the cloud and networking product institutional sector. In particular, because revenue in the smart consumer electronics institutional sector, including the iPhone, also increased, the result is seen not as replacing the existing iPhone business but as securing AI servers as a new growth axis.
The AI server market is viewed as a high-growth field. Advanced technologies such as high-performance GPUs, memory semiconductors and cooling systems are essential. As a result, massive expense is being poured into data center construction, centered on global corporations that have jumped into Generative AI competition. That is why the AI server market is expected to be a major growth driver for Foxconn going forward.
Riding this trend, Foxconn expects its growth to continue for the time being. It projects third-quarter results will rise both from the previous quarter and from a year earlier, with growth in AI rack (rack; a system that integrates AI servers and related equipment) products also set to continue.
Uncertainties remain, however. Foxconn said, "It is necessary to keep watching the impact of highly volatile global political and economic conditions." The comment means geopolitical and economic uncertainties such as the U.S.-China tech hegemony race and changes in tariff policies could affect global supply chains. Attention is on whether Foxconn, which has secured AI servers as a new growth axis, can sustain its growth amid supply chain uncertainty.