Foxconn's Q2 Profit Surges 6% Amid AI Boom

Foxconn net profit rises in second quarter on AI demand

The figures represent the fourth consecutive quarter of profit growth for the firm as it rides the wave of demand for generative AI -- following the runaway popularity of products such as ChatGPT since it launched two years ago.Taiwanese tech giant Foxconn on Wednesday reported a six percent jump in net profit for the second quarter of the year, driven by strong growth in demand for artificial intelligence servers. Also known by its official name Hon Hai Precision Industry, the firm is the world's largest contract electronics manufacturer and assembles devices for major tech companies, most notably Apple's iPhones. It said Wednesday that net profit for April-June rose to NT$35.05 billion (US$1.08 billion) from NT$33 billion the same period last year. The figures represent the fourth consecutive quarter of profit growth for the firm as it rides the wave of demand for generative AI -- following the runaway popularity of products such as ChatGPT since it launched two years ago. According to documents released before an earnings call with investors, revenues for AI servers surged 60 percent from the previous quarter. Foxconn had previously declared ambitions to move beyond electronics assembly, investing significantly to be part of the AI technology market and transition into a "comprehensive situations platform provider". It announced in October it would team up with US chip giant Nvidia to create "AI factories" -- powerful data-processing centres that would drive the production of next-generation products.

Foxconn Net Profit Rises In Second Quarter On AI Demand

Taiwanese tech giant Foxconn on Wednesday reported a six percent jump in net profit for the second quarter of the year, driven by strong growth in demand for artificial intelligence servers. Also known by its official name Hon Hai Precision Industry, Foxconn is the world's largest contract electronics manufacturer and assembles devices for major tech companies, most notably Apple's iPhones. It said Wednesday that net profit for April-June rose to NT$35.05 billion (US$1.08 billion) from NT$33 billion in the same period last year. Revenues for the second quarter increased 19 percent on-year to NT$1.55 trillion, while documents released by Foxconn ahead of an earnings call showed that income from AI servers surged 60 percent from the previous quarter. "The performance of AI servers was more robust than expected and drove revenue growth of the group to be better-than-expected," spokesman James Wu said during the call. The figures represent the fourth consecutive quarter of profit growth for the firm as it rides a wave of demand for generative AI -- following the runaway popularity of products such as ChatGPT since it launched two years ago. Wu said Foxconn was expecting operations to "gradually heat up" as the firm enters the third quarter, traditionally a peak season. "In the first half of this year, the revenue of AI servers more than doubled compared to the same period last year. In the second half of the year, we expect AI servers will continue to be better quarter by quarter," he added. Foxconn, China's largest private-sector employer, had previously declared ambitions to move beyond electronics assembly, investing significantly to be part of the AI technology market and transition into a "comprehensive situations platform provider". The firm announced in October it would team up with US chip giant Nvidia to create "AI factories" -- powerful data-processing centres that would drive the production of next-generation products. It has also sought to diversify its manufacturing supply chain beyond the mainland -- after production was hit by three years of strict Covid restrictions, a bout of industrial unrest and tensions with the United States. In response to a question about the uncertainty surrounding the upcoming US presidential election, Foxconn's CFO David Huang touted the company's "205 bases across 24 countries in Southeast Asia, Europe, North America and South America". "We have the flexibility to adjust global producing capacity... In this circumstance, we can meet the needs of different customers and product demand, which is an advantage compared to other competitors," Huang said.

Foxconn net profit rises in second quarter on AI demand

Taipei (AFP) - Taiwanese tech giant Foxconn on Wednesday reported a six percent jump in net profit for the second quarter of the year, driven by strong growth in demand for artificial intelligence servers. Also known by its official name Hon Hai Precision Industry, Foxconn is the world's largest contract electronics manufacturer and assembles devices for major tech companies, most notably Apple's iPhones. It said Wednesday that net profit for April-June rose to NT$35.05 billion (US$1.08 billion) from NT$33 billion in the same period last year. Revenues for the second quarter increased 19 percent on-year to NT$1.55 trillion, while documents released by Foxconn ahead of an earnings call showed that income from AI servers surged 60 percent from the previous quarter. "The performance of AI servers was more robust than expected and drove revenue growth of the group to be better-than-expected," spokesman James Wu said during the call. The figures represent the fourth consecutive quarter of profit growth for the firm as it rides a wave of demand for generative AI -- following the runaway popularity of products such as ChatGPT since it launched two years ago. Wu said Foxconn was expecting operations to "gradually heat up" as the firm enters the third quarter, traditionally a peak season. "In the first half of this year, the revenue of AI servers more than doubled compared to the same period last year. In the second half of the year, we expect AI servers will continue to be better quarter by quarter," he added. Foxconn, China's largest private-sector employer, had previously declared ambitions to move beyond electronics assembly, investing significantly to be part of the AI technology market and transition into a "comprehensive situations platform provider". The firm announced in October it would team up with US chip giant Nvidia to create "AI factories" -- powerful data-processing centres that would drive the production of next-generation products. It has also sought to diversify its manufacturing supply chain beyond the mainland -- after production was hit by three years of strict Covid restrictions, a bout of industrial unrest and tensions with the United States. In response to a question about the uncertainty surrounding the upcoming US presidential election, Foxconn's CFO David Huang touted the company's "205 bases across 24 countries in Southeast Asia, Europe, North America and South America". "We have the flexibility to adjust global producing capacity... In this circumstance, we can meet the needs of different customers and product demand, which is an advantage compared to other competitors," Huang said.

Apple supplier Foxconn's quarterly profit jumps 6% on AI boom

"In fact, our business visibility is slightly better than that in May," Foxconn spokesman James Wu said on an earnings call, without elaborating. Foxconn said it would start product delivery for AI semiconductor leader Nvidia's GB200 chip in the fourth quarter in small volumes, which would rise further in early 2025. Wu emphasized Foxconn's leading position in the AI server market, saying its capacity and technology would not be easily challenged by competitors. The Taiwanese company said net profit for the April-June quarter rose to T$35.05 billion ($1.09 billion) from T$33 billion in the same period the previous year. That beat analysts' average estimate of T$34.29 billion. It was the fourth consecutive quarterly profit rise for the company. Foxconn said AI servers made up more than 40% of its server business in the second quarter, and that its next generation AI computing solution had brought "strong growth momentum." The company expected revenue for the third quarter to grow significantly from a year earlier, although revenue from smart computer electronics including smartphones was likely to be flat. Formally called Hon Hai Precision Industry Co Ltd, Foxconn has expected its operations to pick up gradually in the second half as many electronics vendors, including Apple, usually release new products ahead of the year-end holiday season. Prior to the earnings announcement, Taipei-based KGI Securities revised up its sales forecast for Foxconn this year, saying strong demand for new iPhones and AI servers could support a better-than-expected outlook in the second half. Shares of Foxconn closed up 2.5% ahead of the results announcement. (Reporting By Yimou Lee and Faith Hung; Editing by Muralikumar Anantharaman, Kim Coghill and Bernadette Baum)

Apple supplier Foxconn's Q2 profit rises 6% thanks to AI boom

It was the firm's fourth consecutive quarterly profit rise. The company said AI servers accounted for more than 40% of its server business in the second quarter, saying its next generation AI computing solution has brought "strong growth momentum." Foxconn had previously expected revenue for the second quarter to grow significantly from a year earlier, although revenue from smart computer electronics including smartphones was likely to be flattish. The company, formally called Hon Hai Precision Industry Co Ltd, has expected its operations to pick up gradually in the second half as many electronics vendors including Apple usually release new products ahead of the year-end holiday season. In a report prior to the earnings announcement, Taipei-based KGI Securities revised up its sales forecast for Foxconn this year, saying strong demand for new iPhones and AI servers were likely to lead to a better-than-expected outlook for the firm in the second half. (Reporting By Yimou Lee and Faith Hung; Editing by Muralikumar Anantharaman and Kim Coghill)

Apple supplier Foxconn's second-quarter profit rises 6% on AI boom

Apple supplier Foxconn reported on Wednesday a 6% rise in second-quarter net profit, driven by strong AI server demand as the company touted "strong growth momentum" from the technology boom. The Taiwanese company, the world's largest contract electronics maker, said net profit for the April-June quarter rose to 35.05 billion New Taiwan dollars ($1.09 billion) from NT$33 billion in the same period the previous year. That beat analysts' average estimate of NT$34.29 billion. It was the firm's fourth consecutive quarterly profit rise. The company said AI servers accounted for more than 40% of its server business in the second quarter, saying its next generation AI computing solution has brought "strong growth momentum."

Apple supplier Foxconn's profit beats forecasts as it rides AI boom

Apple supplier Foxconn on Wednesday surpassed expectations with a 6% rise in quarterly net profit, driven by a boom in demand for AI servers, and stood by its forecast for full-year revenue to grow significantly. The world's largest contract electronics maker said it expected robust demand for artificial intelligence servers to continue to boost growth into the fourth quarter. Foxconn said the development schedule for AI semiconductor leader Nvidia's GB200 chip was on track, adding product delivery will start in the fourth quarter in small volumes, which would rise in early 2025. "If the schedule remains unchanged, the performance of the entire AI server segment may be better than originally estimated," Foxconn vice president and spokesman James Wu said. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) Wu emphasized Foxconn's leading position in the AI server market, which he said accounted for than 40% of the global market share, adding its capacity and technology would not be easily challenged by competitors. "That will not be changed in a short time," he said. The Taiwanese company said net profit for the April-June quarter rose to T$35.05 billion ($1.09 billion) from T$33 billion in the same period the previous year. That beat analysts' average estimate of T$34.29 billion. It was the fourth consecutive quarterly profit rise for the company. Foxconn said AI servers made up more than 40% of its server business in the second quarter and it forecast "AI servers should soon become Foxconn's next trillion-dollar revenue product" in Taiwan dollar terms. The company also wants to replicate the success it has had with manufacturing iPhones with the electric vehicles (EV) business. It said on the call that ongoing talks with two traditional car makers in Japan would be finalised this year. "Rub your eyes and wait," Wu said, without naming the companies. On the full-year outlook for its smartphone business, Foxconn said it remained "flattish" due to a higher base in the first half of last year, adding that the outlook for the second half of this year is better than the corresponding period in 2023. The company expected revenue for the third quarter to grow significantly from a year earlier, although revenue from smart consumer electronics including smartphones was likely to be flat. Formally called Hon Hai Precision Industry Co Ltd, Foxconn has expected its operations to pick up gradually in the second half as many electronics vendors, including Apple, usually release new products ahead of the year-end holiday season. Prior to the earnings announcement, Taipei-based KGI Securities revised up its sales forecast for Foxconn this year, saying strong demand for new iPhones and AI servers could support a better-than-expected outlook in the second half. Shares of Foxconn closed up 2.5% ahead of the results announcement. Read Comments

Apple supplier Foxconn's profit beats forecasts as it rides AI boom

Foxconn said the development schedule for AI semiconductor leader Nvidia's GB200 chip was on track, adding product delivery will start in the fourth quarter in small volumes, which would rise in early 2025. "If the schedule remains unchanged, the performance of the entire AI server segment may be better than originally estimated," Foxconn vice president and spokesman James Wu said. Wu emphasized Foxconn's leading position in the AI server market, which he said accounted for than 40% of the global market share, adding its capacity and technology would not be easily challenged by competitors. The Taiwanese company said net profit for the April-June quarter rose to T$35.05 billion ($1.09 billion) from T$33 billion in the same period the previous year. That beat analysts' average estimate of T$34.29 billion. It was the fourth consecutive quarterly profit rise for the company. Foxconn said AI servers made up more than 40% of its server business in the second quarter and it forecast "AI servers should soon become Foxconn's next trillion-dollar revenue product" in Taiwan dollar terms. The company also wants to replicate the success it has had with manufacturing iPhones with the electric vehicles (EV) business. It said on the call that ongoing talks with two traditional car makers in Japan would be finalised this year. "Rub your eyes and wait," Wu said, without naming the companies. On the full-year outlook for its smartphone business, Foxconn said it remained "flattish" due to a higher base in the first half of last year, adding that the outlook for the second half of this year is better than the corresponding period in 2023. The company expected revenue for the third quarter to grow significantly from a year earlier, although revenue from smart consumer electronics including smartphones was likely to be flat. Formally called Hon Hai Precision Industry Co Ltd, Foxconn has expected its operations to pick up gradually in the second half as many electronics vendors, including Apple, usually release new products ahead of the year-end holiday season. Prior to the earnings announcement, Taipei-based KGI Securities revised up its sales forecast for Foxconn this year, saying strong demand for new iPhones and AI servers could support a better-than-expected outlook in the second half. Shares of Foxconn closed up 2.5% ahead of the results announcement. (Reporting By Yimou Lee and Faith Hung; Editing by Muralikumar Anantharaman, Kim Coghill and Bernadette Baum)

Foxconn Posts Higher Profit, Record Revenue on AI Server Demand -- Update

Foxconn Technology Group reported higher quarterly net profit as its revenue rose to a record on robust demand for artificial-intelligence servers. The world's largest contract electronics maker, known for assembling Apple's iPhones, said Wednesday that its second-quarter net profit was 35.045 billion New Taiwan dollars, equivalent to US$1.08 billion, up from NT$33.00 billion a year earlier. That beat the estimate of NT$33.73 billion in a poll of analysts by FactSet. Quarterly revenue rose 19% to NT$1.551 trillion--a record for the period--supported by its cloud and networking products segment amid strong AI server demand. The Taiwanese company, formally known as Hon Hai Precision Industry, has been taking steps in recent years to diversify its lines of business. It now plays an increasingly important role in building AI servers for U.S. giants such as Amazon and Nvidia. AI server sales surged 60% sequentially in the second quarter, making up more than 40% of the revenue in the cloud and networking business. The segment is Foxconn's second-biggest source of revenue after consumer electronics and has accounted for a growing share of the company's overall sales in the recent quarters. Investors betting on an AI boom have sent the company's stock soaring nearly 80% this year, outperforming a more than 20% jump for the broader Taiwan market. Shares in Foxconn closed 2.5% higher ahead of the results. Foxconn maintained its upbeat guidance for "significantly positive growth" this year, citing demand for AI servers, which will likely improve quarter by quarter in the second half of the year. In an earnings call, Foxconn spokesperson James Wu said the company expects its consumer electronics segment to deliver strong growth in the third quarter from the previous quarter, adding that it "has already started preparing for new products." Analysts have said that Apple's new iPhone with AI features, due to be launched in September, could spur consumers to upgrade their smartphones and support Foxconn's revenue in the third quarter.

AI demand boosts Apple supplier Foxconn's profits

Foxconn, Apple's largest iPhone manufacturer, reports a fourth consecutive quarter of profit increases, which it credits to demand for AI servers. For the previous quarter, Foxconn's increased profits came from better than expected demand for the iPhone. That is likely to continue with the forthcoming launch of the iPhone 16 range, but for the quarter from April to June 2024, Foxconn says its "strong growth momentum" came from AI servers. According to CNBC, those servers accounted for over 40% of Foxconn's server business in the quarter. Overall, Foxconn said that its net profit rose to 35.05 New Taiwan dollars ($1.09 billion), compared to NT$33 billion in the same quarter of 2023. It amounts to a 6% rise in net profit, and was ahead of analysts' expectations. While Foxconn singled out AI server demand, the quarter beginning in April is also when it starts production of the next iPhone. Overall, Apple accounts for more than half of Foxconn's revenues.

IPhone Maker Hon Hai Sees Sales Rising as AI Nudges Profit Up

(Bloomberg) -- Apple Inc.'s main manufacturing partner Hon Hai Precision Industry Co. said it expects revenue to grow in the current quarter and for the rest of year, after reporting a profit rise boosted by demand for servers powering AI applications. The iPhone producer, also known as Foxconn, said on Wednesday that net income in the June quarter was NT$35 billion ($1.1 billion), largely in line with analyst expectations. Hon Hai's revenue for the period, released earlier, surpassed estimates and came in at NT$1.55 trillion, up 19%. This was helped in large part by its growing business of supplying data center operators with servers containing Nvidia Corp.'s AI accelerators. Hon Hai has set itself the goal of securing 40% of the global AI server market, relying on its close relationships with many of the world's biggest tech companies and depth of manufacturing expertise. The company's shares are up close to 80% this year as investors have bought into the artificial intelligence pitch. Earlier this month, compatriot Taiwan Semiconductor Manufacturing Co. said its July revenue rose 45%, outpacing estimates for the quarter and suggesting that AI demand remained robust. What Bloomberg Intelligence Says Given the global increase in AI applications, AI servers are likely to become Hon Hai's key growth engine given its strong partnership with Nvidia. Its robust logistics and manufacturing capability could keep its iPhone assembly share above 50% even as Apple diversifies suppliers, but further ratings upgrade may be capped by low single-digit margins. -- BI analyst Cecilia Chan Shipments of the iPhone in China have in recent months reversed a slump from the start of the year, and the global smartphone market is accelerating its growth. Hon Hai, much like TSMC, benefits from any upsurge in consumer electronics demand, and the addition of AI features and enhancements is widely seen as a catalyst driving users to upgrade their devices. Hon Hai's July sales jumped 22% thanks to AI server sales, and the company's Wednesday report indicated it expects growth across most of its business segments in the current quarter. The company expects strong growth from its cloud, networking and components groups, while smart electronics -- iPhones included -- are set to be roughly flat for the full year.