Foxconn Forecasts Strong Q1 Growth Amid Global Trade Tensions

Taiwan's Foxconn, the world's largest contract manufacturer, announced on Friday that robust demand from technology clients will drive substantial first-quarter revenue growth, despite posting lower-than-expected profits for the previous quarter, says a report by news agency Reuters.

The optimistic outlook comes amid business uncertainty caused by US President Donald Trump's volatile trade policies, highlighting that artificial intelligence (AI) continues to fuel hardware sales. 

“We have not seen CSP (cloud service providers) demand slowing down. There are (market) rumours that CSP demand will peak this year, and then it will go down next year. But we are not seeing that … at least for Foxconn,” Chairman Young Liu was quoted as saying by analysts on a conference call.

Company executives say that AI servers are expected to represent more than half of Foxconn's total server revenue this year as the company expands its production capabilities for Nvidia, the report added.

Foxconn, which also manufactures iPhones for Apple, reported an October-December net profit of T$46.33 billion ($1.41 billion), falling short of the T$54.4 billion average analyst estimate compiled by LSEG. 

This marks Foxconn's first profit decline since the second quarter of 2023, largely attributed to losses in non-operating business segments, though the company did not provide detailed breakdowns.

In January, the company reported that October-December revenue had jumped 15.2 per cent to a quarterly record, driven by strong AI server sales. 

For the current quarter, Foxconn anticipates significant growth in consumer electronics revenue and strong sales from cloud and networking products, though specific numerical guidance was not provided.

The escalating global trade war presents challenges for Foxconn, which maintains substantial manufacturing operations in China and Mexico -- two major US trading partners facing increased import tariffs under the Trump administration. 

Most iPhones manufactured by Foxconn are assembled in China.

The company is currently developing a large manufacturing facility in Mexico dedicated to producing AI servers for Nvidia. Additionally, Apple announced last month that it will collaborate with Foxconn to build a 250,000 square foot facility in Houston for assembling data centre servers that will power Apple Intelligence.

Foxconn executives indicated plans for production partnerships with customers across several U.S. states.