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Foxconn's Profit Rises 19% in Q1 as AI Server Demand Drives Record Revenue
Hon Hai Precision Industry (TPE:2317), also known as Foxconn, posted higher first-quarter profit as booming artificial intelligence server demand drove record revenue.Net profit attributable to the parent company rose 19% to NT$49.9 billion in the January-to-March period, the company said Thursday.Earnings per share came in at NT$3.56 from NT$3.03 in the corresponding period last year.Revenue climbed 29% to a record NT$2.12 trillion.Nvidia's largest AI server supplier and Apple's main iPhone assembler said rapid growth in AI server demand reshaped its revenue mix, with its cloud and networking business accounting for nearly half of group revenue during the quarter.Foxconn's rotating Chief Executive, Michael Chiang, said artificial intelligence continued to underpin the company's growth outlook as major cloud service providers ramp up spending on AI infrastructure."AI remains the most important growth driver this year," Chiang said on an earnings call, according to Reuters. He added that major cloud service providers have recently increased capital spending plans."AI is not a short-term theme, but a structural transformation of the industry," Chiang said.The company forecast significant quarter-over-quarter and strong year-over-year growth in the second quarter, supported by sustained AI demand, while maintaining its full-year outlook for strong growth.Foxconn said AI rack shipments are expected to more than double this year, with quarterly shipment volumes rising sequentially as customer projects advance.The company also said shipments and revenue from high-speed switches above 800G could double this year as AI data centers increasingly adopt faster networking architectures.Capital expenditures rose about 27% year over year to NT$174 billion last year and are expected to increase by more than 30% this year as Foxconn expands regional manufacturing capacity, automation deployment, and core infrastructure.Foxconn's growing AI infrastructure ambitions come as SoftBank (TYO:9984) has reportedly begun discussions with Nvidia and Foxconn on plans to develop "made-in-Japan" artificial intelligence servers, according to a Nikkei report earlier this month.The report said SoftBank aims to establish a domestic AI server production framework by the end of the decade, initially assembling externally sourced components before eventually expanding into full-scale server manufacturing.Foxconn has also been expanding its footprint in electric vehicles, recently deepening its push into Europe through a strategic partnership with Poland's state-backed ElectroMobility Poland.
TPE:2317TYO:9984
