Foxconn, the world's largest electronics manufacturer, has announced a significant surge in its first-quarter 2025 profits, driven primarily by the booming demand for AI servers. The company's net profit attributable to the parent company reached NT$42.1 billion, a remarkable 91% increase compared to the same period last year. This impressive growth underscores Foxconn's successful pivot towards AI infrastructure and its ability to capitalize on the rapidly expanding market.
The company's first-quarter revenue also reached a record high for the period, totaling NT$1.6443 trillion, a 24% increase year-on-year. This growth was fueled by strong sales in AI servers and networking products. Foxconn Chairman Young Liu emphasized that AI is the defining theme of 2025, with the AI server business experiencing revenue growth exceeding 50% in the first quarter. He anticipates that AI servers will continue to drive strong momentum throughout the year, potentially doubling in revenue in the second quarter.
Foxconn's strategic shift towards AI infrastructure is evident in the changing composition of its revenue streams. While the company is still known as Apple's iPhone assembler, cloud and networking products, including AI servers, now represent a substantial portion of Foxconn's total revenue. This transition reflects the company's successful diversification beyond traditional consumer electronics and its proactive efforts to tap into high-growth sectors. By 2025, Foxconn expects AI server revenue to surpass NT$1 trillion, constituting 50% of its total server revenue and capturing over 40% of the global market share. Foxconn's strategic partnership with Nvidia, particularly as the sole assembler of Nvidia's Blackwell-powered GB200 servers, positions the company at the heart of hyperscalers' AI spending.
Looking ahead, Foxconn anticipates significant growth in the second quarter, driven by increased demand in cloud and networking products, as well as components. The company has adjusted its full-year outlook to "significant growth," while remaining confident in its key business segments, particularly AI servers and networking products. Foxconn's AI server revenue in the second quarter is expected to nearly double both on-quarter and on-year. The company plans to commence delivering AI servers equipped with Nvidia's GB series GPUs to North American cloud providers in the second quarter.
Despite the optimistic outlook, Foxconn faces certain challenges and uncertainties. Trade policy volatility, particularly regarding US tariffs on Chinese-made goods and Vietnamese components, poses a risk. Currency headwinds, such as the appreciation of the Taiwan dollar, could also erode revenue. To mitigate these risks, Foxconn is implementing a regional manufacturing strategy, diversifying its production capacity across various locations, including Mexico, the United States, Asia, and Europe. This diversification allows Foxconn to navigate geopolitical tensions, respond to local market demands, and mitigate supply chain disruptions. Furthermore, the company is expanding its footprint in the electric vehicle (EV) sector, viewing it as a major future growth driver. Foxconn is collaborating with Mitsubishi Motors to design and develop EV models for the Oceania market, marking a significant milestone in its EV business.
In addition to AI and EVs, Foxconn is also focusing on other strategic initiatives, including expanding its semiconductor capabilities, entering the aerospace and drone markets, and deepening its customer relationships through strategic partnerships. The company's expansion in India is also noteworthy, with revenue more than doubling in fiscal year 2024-25, driven by iPhone production. Foxconn's employee count in India has also increased significantly, reflecting its growing presence in the country.
Overall, Foxconn's first-quarter results demonstrate its successful transformation into a key player in the AI infrastructure market. While challenges remain, the company's strategic initiatives, diversified manufacturing footprint, and strong partnerships position it for continued growth and success in the years to come.
