Apple’s supplier Foxconn reported a higher-than-expected profit due to the increasing demand for artificial intelligence (AI) products and services.


Foxconn, a prominent Apple supplier, outperformed expectations by achieving a notable 6% increase in its quarterly net profit.

This surge was primarily attributed to the burgeoning demand for AI servers. The company remains steadfast in its projection of substantial growth in full-year revenue.

As the world’s leading contract electronics manufacturer, Foxconn anticipates sustained demand for artificial intelligence servers, which will continue to fuel growth in the upcoming fourth quarter.

Furthermore, Foxconn affirmed that the development timeline for Nvidia’s GB200 chip, a cutting-edge AI semiconductor, is progressing as planned.

Product delivery is scheduled to commence in the fourth quarter, albeit in limited quantities initially, with a subsequent increase in volume anticipated in early 2025.

“If the schedule remains unchanged, the performance of the entire AI server segment may be better than originally estimated,” Foxconn vice president and spokesman James Wu said.

Wu highlighted Foxconn’s dominant position within the AI server market, accounting for over 40% of the global market share. He further emphasized that the company’s capacity and technological capabilities would not be easily surpassed by competitors.

“That will not be changed in a short time,” he said.

The Taiwanese corporation reported a rise in net profit for the second quarter of the fiscal year, with a notable increase from T$33 billion to T$35.05 billion, surpassing analysts’ projections of T$34.29 billion. This marks the fourth consecutive quarter of profit growth for the company.

Artificial intelligence (AI) servers have emerged as a significant contributor to the company’s server business, accounting for over 40% of its revenue in the second quarter. Foxconn anticipates that AI servers will soon become a trillion-dollar revenue product in Taiwan dollar terms.

Furthermore, the company aims to leverage its successful experience in manufacturing iPhones to venture into the electric vehicle (EV) industry. Ongoing discussions with two prominent Japanese automakers are expected to be finalized within this year.

“Rub your eyes and wait,” Wu said, without naming the companies.

Regarding the annual forecast for its smartphone division, Foxconn indicated that it remains relatively stable, attributed to a higher comparative performance in the first half of the previous year.

The company noted that the expectations for the latter half of this year are more favorable than those for the same period in 2023.

It anticipates a significant increase in revenue for the third quarter compared to the previous year, although revenue from smart consumer electronics, including smartphones, is expected to remain unchanged.

Officially known as Hon Hai Precision Industry Co Ltd, Foxconn foresees a gradual improvement in its operations during the second half, as numerous electronics manufacturers, including Apple, typically launch new products in anticipation of the year-end holiday season.

Before the earnings report, KGI Securities, based in Taipei, raised its sales projections for Foxconn this year, citing robust demand for new iPhones and AI servers as potential factors for a more optimistic outlook in the latter half. Foxconn's shares rose by 2.5% prior to the announcement of the results.