Mar 14, 07:43 AM

Foxconn, Nvidia Supplier and Apple iPhone Assembler, Reports 13% Q4 Profit Drop, Forecasts Strong Q1 Growth Driven by AI Servers

Foxconn, the world's largest contract electronics maker and a key supplier to Nvidia and assembler of Apple's iPhones, reported a 13% drop in fourth-quarter profit, with net income reaching T$46.33 billion ($1.41 billion), falling short of the T$54.4 billion consensus estimate from 15 analysts. The decline marks the company's first quarterly profit drop since the second quarter of 2023. Despite the profit miss, Foxconn's fourth-quarter revenue reached a record NT$2.13 trillion, driven by strong sales of AI servers. The company anticipates strong revenue growth in the first quarter of 2025, driven by robust demand from its tech clients. Foxconn, also known as Hon Hai Precision Industry, expects significant growth in consumer electronics and strong sales in cloud and networking products. The company's AI server business, which saw a 150% year-over-year revenue increase in 2024, is projected to grow over 100% year-over-year in the first quarter, with revenue expected to surpass NT$1 trillion. This optimism contrasts with a cautious outlook among many businesses due to global trade tensions, particularly with major manufacturing hubs in China and Mexico facing increased tariffs under the Trump administration. Foxconn's investment in AI server production and the continued demand from cloud service providers are key factors in its growth strategy. The company's AI server market share is above 40%, with shipments increasing each quarter. Despite weak Chinese iPhone sales impacting its margins, Foxconn's focus on AI servers and other high-growth areas positions it for a strong performance in the coming year.