Foxconn Q2 revenue beats market forecast on AI server demand

TAIWAN’S Foxconn, the world’s largest contract electronics maker and Apple’s biggest iPhone assembler, posted on Friday (Jul 5) better-than-expected quarterly revenue on AI server demand, and forecast continued growth in the current quarter.

The third quarter is traditionally the start of the season for Taiwan’s tech companies to race to supply smartphones, tablets and other electronics to major vendors such as Apple for Western markets’ year-end holiday period.

Foxconn is also powering ahead due to strong demand for servers for artificial intelligence (AI) applications, and its customers include AI darling Nvidia.

This year’s third quarter is expected to see revenue grow both year-on-year and compared with the previous quarter, Foxconn said in a statement.

“Entering the peak season of the second half of the year, we anticipate our operation to gradually gain momentum,” it said.

The company does not provide numerical forecast.

Foxconn, formally called Hon Hai Precision Industry, said revenue last month reached T$490.7 billion (S$20.4 billion), up 16.1 per cent year-on-year and at the second-highest level for the same period.

For the second quarter, revenue soared 19.1 per cent year-on-year to T$1.55 trillion, beating a T$1.51 trillion LSEG SmartEstimate, which gives greater weight to forecasts from analysts who are more consistently accurate, and a record high for the same period.

Second-quarter revenue in its cloud and networking products segment showed strong growth year-on-year and quarter-on-quarter benefiting from strong AI server demand, it said.

SEE ALSO

Foxconn gets licence to invest US$551 million more in Vietnam, media reports

Foxconn to invest US$383 million in Vietnam circuit board plant: state media

However for smart consumer electronics products, including smartphones, revenue was flat year-on-year, Foxconn said, without providing an explanation.

Foxconn’s shares have surged 105 per cent so far this year, outperforming a 31 per cent jump for the broader Taiwan market.

In line with the overall market, Foxconn’s shares closed flat on Friday ahead of the revenue data release.

The company will report its second-quarter earnings on Aug 14. REUTERS