Foxconn, Apple's major production partner, has reported a significant increase in its quarterly revenue, driven by strong demand for servers used in AI development. This rise has offset the sluggish sales in smartphones. In the third quarter, Foxconn's revenue surged 20.2% year-over-year, reaching 1.85 trillion New Taiwan dollars (approximately $579 billion), surpassing Bloomberg analysts' expectations of 1.78 trillion New Taiwan dollars.
The company revealed that its third-quarter sales set a new record for the period and exceeded its own projections, although specific forecast figures were not disclosed. This growth follows a 19% increase in second-quarter revenue, marking the company's first revenue growth since early 2023.
Analysts credit this performance to the expansion of Foxconn's server supply business, which includes NVIDIA AI chips. The company anticipates that revenue will continue to grow through the remainder of the year. Since the beginning of 2024, Foxconn's stock price has risen over 85%.
Foxconn's future growth is expected to be propelled by the increasing penetration of AI and stable iPhone demand, with sales accelerating in the 2024-2025 fiscal year. The company's vertical integration and global presence position it favorably as AI servers become more complex and localized production needs increase. As GPU supply issues improve and new models like Blackwell GB200 are introduced, more upward potential is expected in the coming quarters.
While demand for smartphones and personal computers is recovering, stabilizing the smart consumer electronics and computing products, Foxconn's electric vehicle contract manufacturing business might underperform due to slowing global demand, contributing minimally to sales.
