Business thriving at Foxconn, as server sector sees significant growth
Foxconn Shifts Gears, AI Servers Surpass iPhone Sales in Q2 2025
In a significant move, Foxconn, the world's largest contract manufacturer of electronic devices, has seen its AI server sales surpass the revenue from its consumer electronics business, including the production of Apple iPhones, for the first time in Q2 2025.
The Taiwanese company, officially known as Hon Hai Precision Industry, reported a revenue increase of nearly 16% to 51.29 billion euros, with AI-related products accounting for about 41% of its total sales. The surge in AI server sales is particularly noteworthy, with a growth of over 60% year-over-year in Q2 alone and an expected growth of more than 170% in Q3 2025.
This shift towards AI infrastructure is a strategic pivot for Foxconn, as it navigates the booming global high-performance computing market. The company claims a near 40% market share in global general-purpose and AI servers and is expanding production capacity to meet growing demand from major cloud service providers and hyperscale data centers.
New factories are planned in Houston, Texas, and Mexico to produce AI servers for Nvidia, a move that underscores Foxconn's commitment to this new growth sector. The company's strong Q2 performance was driven primarily by AI server demand, with a 27% net profit increase and a 19% revenue growth to a record NT$1.55 trillion.
Foxconn views AI hardware as a structural, long-term growth opportunity rather than a temporary trend. This is evident in the company's robust capital expenditures, which grew 25% year-over-year in the first half of 2025, and plans to maintain annual growth exceeding 20%.
In addition to its push into the electric vehicle business, Foxconn is also collaborating with electric motor specialist Teco to build AI data centers. The company is closely monitoring US tariffs, as most devices for the US market are now assembled in India.
Foxconn's announcement of these developments was made on Thursday, with no absolute sales figures provided for the current quarter. However, the company forecasts significant growth for the coming months. This evolution of Foxconn into a critical player in the AI high-performance computing market is a testament to its deep expertise in server manufacturing and its strategic partnerships with tech firms, firmly establishing AI servers as its new growth engine.
[1] TechCrunch [2] Reuters [3] Bloomberg [4] CNBC [5] The Wall Street Journal
- The shift towards AI infrastructure by Foxconn has attracted attention from various news outlets, with TechCrunch, Reuters, Bloomberg, CNBC, and The Wall Street Journal all reporting on the company's significant increase in AI server sales.
- As Foxconn expands its production capacity for AI servers, it is leveraging partnerships with tech giants like Nvidia, a move that aligns with the broader trend towards data-and-cloud-computing and artificial-intelligence in the finance industry.
- The surge in AI server sales has propelled Foxconn to nearly a 40% market share in global general-purpose and AI servers, positioning the company as a key player in the high-performance computing industry.
