Foxconn, major Apple supplier, sees share rise due to increased AI demand
In a significant shift, tech giant Foxconn is rapidly diversifying beyond iPhone production to focus on AI servers, smart manufacturing, electric vehicles (EVs), and smart city technologies. This strategic pivot positions the company as a key player in the upcoming AI era and new technology sectors.
On Thursday, Foxconn's stock soared due to a substantial profit gain, surpassing analyst estimates of NT$38.8 billion. The company's net profit increased by 38.6% in the first half of 2025, driven primarily by AI-related sales.
Foxconn's AI server business, now larger than iPhone assembly, saw over 60% growth in Q2 2025 and is expected to soar 170% in Q3, fueled by hyperscale cloud provider demand. The company collaborates with tech giants like NVIDIA and Siemens to integrate AI infrastructure and digital twins, accelerating factory deployment by 30% and enhancing vertical integration.
The company's future plans include heavy investments in AI server manufacturing, modular data centers, and cloud networking. Foxconn aims to revitalize its Ohio site to meet U.S. AI computing demand and use its "AI Factory" platform to train AI models and create a full ecosystem across its operations.
Foxconn is also expanding its EV components and production, with mass production of batteries underway, new EV models approaching launch and certification, and partnerships with Mitsubishi Motors and North American markets. The company is cooperating with Taiwanese electric motor specialist Teco to build AI data centers.
In the smart city sector, Foxconn plans to integrate AI with urban development technologies to expand into new industry verticals.
Financially, Foxconn forecasts a revenue growth of over 170% in the AI server segment for the current quarter. The company plans $1.5 billion in investments to diversify beyond smartphones while maintaining strong liquidity.
The cloud and network segment outperformed the core business of consumer electronics for the first time, with smartphones and similar devices accounting for 35% of Foxconn's revenues, now reduced to 41% due to the growth in server products.
The profit surge was boosted by the boom in AI servers, with Foxconn producing server racks for AI applications as a key partner of US chip giant Nvidia. The AI boom should allow AMD, Nvidia, and TSMC to continue their rally.
New plants in Mexico and the US are set to further boost production for Nvidia. However, the company did not provide any specific details about the performance of Apple iPhone production.
It's important to note that the publisher Börsenmedien AG's majority shareholder, Mr. Bernd Förtsch, has direct and indirect positions in Apple Inc.
In summary, Foxconn is reinventing itself from a smartphone manufacturer to a leader in AI-driven manufacturing, cloud infrastructure, electric vehicles, and smart technologies, backed by significant capital investment and strategic alliances.
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