Foxconn Reports Record Quarter Driven by AI Server Demand, Outlook for 2025 Moderated

Foxconn, the world's largest electronics manufacturer, has announced a significant increase in its net profit for the first quarter of this year, nearly doubling compared to 2024. The company's revenue surged by 24% year-on-year, largely attributed to the robust demand for artificial intelligence (AI) servers. Additionally, Foxconn is making strides in the electric vehicle (EV) sector, although its growth forecast for the full year has been tempered by geopolitical uncertainties and currency fluctuations.

In March, Foxconn had already indicated that tariffs imposed by the U.S. government under the Trump administration were causing considerable challenges for the tech giant. Young Liu, the company's chairman, noted that the unpredictable and erratic policies of the new U.S. administration made it exceptionally difficult to forecast business trends for the upcoming year. Compounding these challenges is a strengthened Taiwanese dollar, which has resulted in lower revenues when converted to the comparatively weaker U.S. dollar.

Despite these hurdles, Foxconn, officially known as Hon Hai Technology Group, anticipates substantial growth in 2025, although it previously projected even stronger growth. In the first quarter, the company reported a record quarterly revenue of approximately EUR48.7 billion, reflecting a 24% increase from the same period last year. The operating profit also rose by 27%, while net profit surged by 91%. For the current second quarter, which is typically a slower period, Foxconn expects continued growth, driven by its cloud and networking product segments, as well as component sales.

Foxconn's international footprint plays a crucial role in its operations, with production facilities in 24 countries. The company highlights over 50 locations across the Americas, more than 10 in Europe, and a similar number in India, totaling 233 production sites worldwide. Notably, in the United States, Foxconn and Wistron are establishing factories for the production of Nvidia servers; these initiatives were initiated prior to the Trump administration's trade policies.

Turning to the automotive sector, Liu expressed optimism regarding Foxconn's partnership with Mitsubishi to develop and manufacture an electric vehicle model. A recent agreement outlines that Foxconn will assist Mitsubishi in selling this model in Australia and Oceania, marking a significant milestone for Foxconn's entry into the electric vehicle market. Liu is hopeful for similar collaborations with other automotive manufacturers, although he has only confirmed discussions with unspecified Japanese carmakers.

Investors have responded positively to Foxconn's latest developments. Although the company's stock price had fallen over 11% since the beginning of the year, primarily due to concerns over tariffs, shares have rebounded, gaining 2.6% following the recent financial report.