AFP – Tech giant Foxconn on Thursday reported a second straight quarter of profit growth, with the Apple supplier boosted by demand for artificial intelligence (AI) hardware and infrastructure.
The firm – also known by its official name Hon Hai Precision Industry – is the world’s biggest contract electronics manufacturer and assembles devices for several companies, most notably Apple’s iPhones.
It said net profit for October-December rose to USD1.6 billion.
CEO Young Liu said the company’s overall performance was “better than expected”.
He credited the boost to the growing demand for generative AI, a technology that has skyrocketed in popularity since ChatGPT was introduced to the public in late 2022.
With ambitions to move beyond electronics assembly, Foxconn has invested significantly to be a part of the AI technology market.
Most notably, it announced last October it would team up with US chip giant Nvidia to create ‘AI factories’ – powerful data-processing centres that would drive the manufacturing of next-generation products.
“I think AI servers will be the main drive for growth this year,” Liu said on Thursday, adding that Foxconn expects the sector to account for 40 per cent of the group’s overall server revenue.
The company is “in the process of transitioning from a manufacturing company to a comprehensive situations platform provider”, Liu added.
“This year, its key focuses will be on electric vehicles, AI, semiconductors, and low-earth orbit satellites.”
Thursday’s figures follow better-than-expected profits in its third quarter thanks to rising demand ahead of the holiday season.
The boost came on the heels of two consecutive quarterly misses – with January-March seeing a drop of 56 percent and a one percent fall in the following three months.
While Liu said the outlook for 2024 has been raised “from neutral to significant growth” thanks to the AI demand, challenges may lie ahead for Foxconn.
