Foxconn, the world’s largest iPhone assembler and a major AI server manufacturer for Nvidia, reported stronger-than-expected second-quarter earnings, driven by surging demand for artificial intelligence infrastructure.
For the first time, Foxconn’s AI server business generated more revenue than its smart consumer electronics segment last quarter, highlighting the company’s strategic pivot toward data centre technologies.
AI Servers Drive Record Growth
Foxconn forecast a significant rise in Q3 revenue, with AI server sales expected to jump over 170% year-over-year.
Cloud and networking products, which include servers, accounted for 41% of Foxconn’s Q2 revenue, compared to 35% from smart consumer products. The company expects AI server revenue to continue climbing in the current quarter, while smart electronics may see a slight decline.
Kathy Yang, Foxconn’s rotating CEO, said,
“AI has been the primary growth driver so far this year.”
However, she cautioned that tariff changes and currency fluctuations could impact future performance.
Apple iPhone Production and Tariff Risks
Most iPhones for Apple are still assembled in China, but Foxconn has shifted a large portion of U.S.-bound production to India to avoid tariff costs. The company also warned of potential U.S. tariff impacts on consumer electronics, especially after strong iPhone sales in the June quarter.
Expanding AI Server Capacity
Foxconn plans to increase capital spending by over 20% in 2025 to boost AI server production capacity in Texas and Wisconsin. The company is also building AI server plants in Mexico for Nvidia.
Global trade tensions, particularly between the U.S. and China, remain a risk. However, a 90-day tariff truce announced this week could offer short-term relief.
Electric Vehicle Ambitions and Restructuring
Beyond electronics, Foxconn is pursuing electric vehicle (EV) manufacturing as a long-term growth strategy. Earlier this month, the company agreed to sell its Lordstown, Ohio, car plant to SoftBank for $375 million, but will continue using the facility to produce cloud-related products.
Foxconn still plans to launch its Model C EV in the U.S., with initial production set to take place in Taiwan.
Earnings Beat Analyst Expectations
For the April–June 2025 quarter, Foxconn reported a net profit of T$44.4 billion ($1.48 billion), beating the T$38.8 billion consensus estimate compiled by LSEG.
With AI servers now surpassing iPhones as a revenue driver, Foxconn is positioning itself as a global leader in AI infrastructure manufacturing, leveraging booming demand from tech giants such as Amazon, Microsoft, and Google.
