Prime Highlights-
- Foxconn posts 35 percent Q2 profit rise to T$59.97 billion, beats forecasts.
- AI servers cross 51 percent of revenue for the first time, company sees continued growth.
Key Facts-
- Net profit reaches $1.86 billion, up from T$44.4 billion a year earlier.
- Foxconn expects 30 percent capex rise in 2026, Vera Rubin shipments begin in Q4.
Background-
Taiwan’s Foxconn, the world’s largest contract electronics maker, reported a 35 percent rise in second-quarter profit, topping analyst forecasts on continued strong demand for AI. The company, formally known as Hon Hai Precision Industry, said it expects AI demand to keep driving growth through the year.
Net profit for the April to June period reached T$59.97 billion ($1.86 billion), ahead of an LSEG consensus estimate of T$58.8 billion and up from T$44.4 billion a year earlier.
The company, which serves as Nvidia’s largest server maker and Apple’s top iPhone assembler, held to its earlier forecast of strong revenue growth for the year, without offering numeric guidance.
The cloud and networking products segment, which includes AI servers, made up 51 percent of second-quarter revenue, crossing the 50 percent mark for the first time, while smart consumer electronics products, including iPhones, contributed 29 percent.
Rotating CEO Michael Chiang said AI-related business would keep growing in the third quarter, and combined with ICT products entering their peak season in the second half, the company expects strong sequential and annual growth.
On Nvidia’s Vera Rubin server products, Chiang said Foxconn would begin mass-production preparation in the third quarter, with shipments starting in the fourth quarter and volumes rising gradually to become a major product line next year.
Chiang added that customer demand remains strong, with next year’s AI server rack market set to benefit from growing CoWoS capacity from TSMC, the advanced packaging technology used in AI chip production.
The market currently expects CoWoS capacity to grow more than 50 percent next year, opening up further opportunity for next-generation AI server rack shipments.
Foxconn forecasts a 30 percent rise in capital expenditure for 2026 compared with the previous year, as it continues building AI server capacity in Mexico and Texas and expanding its India-based iPhone production.
