Published by Global Banking & Finance Review®
Posted on March 14, 2025
3 min readLast updated: January 24, 2026
Add as preferred source on GoogleFoxconn anticipates strong Q1 revenue growth driven by AI demand, despite a recent profit miss. The company expands US production amid trade tensions.
By Wen-Yee Lee and Yimou Lee
TAIPEI (Reuters) -Taiwan's Foxconn,the world's largest contract electronics maker, said on Friday that solid demand from its tech clients would drive strong revenue growth in the first quarter.
The upbeat forecast contrasts with a cautious note struck by many other businesses, rattled by U.S. President Donald Trump's tumultuous trade policy, and underscores that booming demand for artificial intelligence is not over yet and would further drive hardware sales.
"We have not seen CSP (cloud service providers) demand slowing down. There are (market) rumours that CSP demand will peak this year, and then it will go down next year. But we are not seeing that ... at least for Foxconn," Chairman Young Liu told analysts on a conference call.
He said AI servers would account for more than half of the company's total server revenue this year, as it expands production for Nvidia.
"For the first quarter, we expect AI server revenue to grow by more than 100%, both quarter-over-quarter and year-over-year," Liu said.
Foxconn, which also makes iPhones for Apple, booked an October-December net profit of T$46.33 billion ($1.41 billion), missing the T$54.4 billion average of 15 analyst estimates compiled by LSEG. Net profit declined by 13% compared to T$53.15 billion in the same period a year earlier.
The profit decline was Foxconn's first since the second quarter of 2023, when it fell 0.9%, and largely stemmed from an investment loss in Japan's Sharp and currency exchange losses. Foxconn did not provide a breakdown of its non-operating income and expense account.
In January, Foxconn said October-December revenue jumped 15.2% to a record for that quarter on strong AI server sales.
The company, formally Hon Hai Precision Industry, said on Friday that first-quarter revenue from consumer electronics is likely to grow significantly and that sales from cloud and networking products would grow strongly, without giving numerical guidance.
It expects its first-quarter performance to be better than the average level of the past five years.
Analysts' average estimate for Foxconn's first-quarter net profit is T$43.56 billion, according to an LSEG SmartEstimate drawn from 15 analysts. That would represent a 98% increase from the same period a year ago.
An escalating global trade war has complicated prospects as Foxconn has a major manufacturing presence in China and Mexico, two of the biggest U.S. trading partners facing increased import tariffs under Trump's administration.
Most of the iPhones it makes for Apple are assembled in China. Foxconn is also building a large manufacturing facility in Mexico to produce AI servers for Nvidia.
Apple said last month it will work with Foxconn to build a 250,000 square foot (23,200 square metre) facility in Houston to assemble servers for data centres that power Apple Intelligence.
Liu said it will plan production cooperation with its customers in several U.S. states.
"Some tariff factors may affect demand ... But we have planned in different regions over the past years and have made our supply chain resilience better than it was eight years ago during President Trump's first term."
"In response to President Trump's push for American manufacturing, we will replicate our global production experience and actively establish production bases in the United States.
"It is difficult to predict the U.S. government's attitude and approach towards tariffs. We can only wait and see and do our best with what we can control," he said.
($1 = 32.9550 Taiwan dollars)
(Reporting by Wen-Yee Lee, Yimou Lee and Faith Hung; Writing by Miyoung Kim; Editing by Kim Coghill and Christopher Cushing)
The article discusses Foxconn's forecasted strong Q1 revenue growth driven by AI demand, despite a recent profit miss.
Foxconn is expanding its manufacturing presence in the US to mitigate the impact of trade tensions.
AI servers are expected to account for over half of Foxconn's server revenue, highlighting their strategic importance.
Explore more articles in the Finance category
