Taiwan’s Hon Hai Precision Industry, known globally as Foxconn, delivered record second-quarter operating and net profits as artificial intelligence server sales overtook traditional electronics assembly for the first time.
The world’s largest contract manufacturer reported net profit of NT$44.4 billion ($1.48 billion) for the April-June period, up 27% from a year earlier. Revenue reached NT$1.79 trillion ($59.7 billion), meeting analyst expectations. Earnings per share climbed to NT$3.19 ($0.11) from NT$2.53 a year ago.
AI servers now represent 41% of quarterly revenue, surpassing the company’s flagship consumer electronics division at 35%. The shift marks a dramatic transformation for the Apple iPhone assembler, which built its fortune on low-margin manufacturing contracts.
Foxconn expects AI server revenue to surge more than 170% year-over-year in the third quarter, with annual sales projected to exceed NT$1 trillion ($33.3 billion). The company cited continued demand from cloud service providers and partnerships with Nvidia Corp.
However, the optimistic projections face headwinds. Competition from Dell Technologies, Hewlett Packard Enterprise and Chinese rivals is intensifying in the AI infrastructure market. Supply chain constraints and geopolitical tensions, including potential U.S. tariffs on Taiwan, could pressure margins despite the revenue growth.
Foxconn’s rotating CEO Kathy Yang acknowledged monitoring “changes in geopolitics, tariffs, and global exchange rates” as potential risks to the company’s aggressive growth targets.
