The world’s biggest contract electronics maker, Foxconn, stated on Wednesday that its third-quarter profit increased 17 percent compared to the previous year, which drives growth in its artificial intelligence server business.
Here’s how Foxconn performed in the quarter in September, in comparison to LSEG SmartEstimates, which are projected by effective analysts such Revenue is worth $2.06 trillion New Taiwan dollars ($66.29 billion) compared to NT$2.06 trillion expected, net profit is forecasted NT$57.67 billion in comparison to NT$50.41 billion.
The firm manufactures server racks designed for AI workloads and has become a key partner to American AI chip darling Nvidia.
Foxconn, which is officially known as Hon Hai Precision Industry, is referred to as the largest manufacturer of Apple’s iPhones in the world; therefore, it has been shifting into different business sectors, including artificial intelligence.
The manufacturers of the company’s server racks were designed for AI workloads and have been a significant partner to American AI chip Nvidia.
The company reported that it anticipates operations in the second half of the year during the traditional peak season, to remain uninterrupted in quarterly expansion, citing stronger AI server shipments and increasing demands for information and communications technology products.
Therefore, Foxconn warned of the political and economic uncertainty of the world, with exchange rate variations, which will need continued close monitoring.
Foxconn stated that its ‘Cloud and Networking’ segment had witnessed a significant year-on-year expansion, backed by demand for AI server racks.
Senior Analyst of Counterpoint Research, Ivan Lam, informed CNBC that the Server of Foxconn’s manufacturing business is now in a strong expanding period, due to increased demand.
The firm is elevating its dominance in contract manufacturing to set both current and future orders, Lam added, emphasizing this as a clear case of “follow the cash,” and a strategy that naturally involves sacrificing a few consumer electronics orders.
He also said that Foxconn’s move toward high-growth server manufacturing “is clearly paying off,” after trading parts of its consumer electronics footprint for longer-term momentum.
Although the component price volatility, currency swings, and logistics challenges may pressure margins, Lam reports that he expects fourth-quarter results of Foxconn to “remain favorable.”
A memorandum of understanding was signed by Foxconn with Mitsubishi Electric on November 6 to supply energy-efficient AI data center solutions worldwide.
As for AI data centers, Foxconn and Mitsubishi Electric’s strategy is to expand with new business models and solutions by utilizing their mixed technological and knowledge capabilities.
