Foxconn reported on Wednesday (14) quarterly results above market expectations, with a 6% increase in quarterly net profit, driven by a boom in demand for artificial intelligence servers, and maintained its forecast of significant revenue growth for the year.
The world’s largest contract electronics maker said it expects robust demand for AI servers to continue to drive growth in the fourth quarter.
Foxconn said the development schedule for Nvidia’s GB200 chip is on track, adding that delivery of the product will begin in the fourth quarter in small volumes, scaling up in early 2025.
“If the schedule remains unchanged, the performance of the entire AI server segment could be better than originally estimated,” said Foxconn vice president and spokesman James Wu.
Wu emphasized Foxconn’s leading position in the AI server market, which he said accounted for more than 40 percent of the global market share, adding that the company’s capabilities and technology cannot be easily replicated by competitors.
“That’s not going to change in a short space of time,” he said.
The Taiwanese company said net profit for the April-June quarter rose to T$35.05 billion ($1.09 billion), compared with T$33 billion in the same period a year earlier. That beat analysts’ average estimate of T$34.29 billion.
The result marked the fourth consecutive increase in the company’s quarterly profit.
Foxconn said AI servers accounted for more than 40% of its server business in the second quarter and predicted that “AI servers are expected to soon become Foxconn’s next $1 trillion revenue product” (Taiwan dollars).
The company also wants to replicate its success in making iPhones in the electric vehicle business. The company said on the earnings call that ongoing negotiations with two traditional Japanese automakers will be finalized this year.
“Rub your eyes and wait,” Wu said, without naming the companies.
On the full-year outlook for its smartphone business, Foxconn said it remained “flat” due to a higher base in the first half of last year, adding that the outlook for the second half of this year is better than the corresponding period in 2023.
The company expects third-quarter revenue to grow significantly from a year earlier, although revenue from smart consumer electronics, including smartphones, will likely be flat.
Formally called Hon Hai Precision Industry, Foxconn expects its business to gradually grow in the second half as many electronics brands including Apple typically launch new products ahead of the holiday shopping season.
Source: CNN Brasil
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