Nvidia supplier Foxconn posts 17% rise in Q3 profit, beats forecasts

[TAIPEI] Taiwan’s Foxconn, the world’s largest contract electronics maker, posted a forecast-beating 17 per cent rise in third-quarter profit on Wednesday (Nov 12), fuelled by the sustained strength in demand for artificial intelligence (AI) servers.

This demand is expected by Foxconn to drive growth next year too.

Net profit for the July-to-September period for Nvidia’s biggest server maker, and Apple’s top iPhone assembler, was NT$57.67 billion (S$2.42 billion), higher than the consensus estimate of NT$50.4 billion compiled by the London Stock Exchange Group (LSEG).

Foxconn, formally called Hon Hai Precision Industry, last month reported a forecast-beating third-quarter revenue on strong demand for AI products.

In its earnings report, Foxconn said it should see significant year-on-year revenue growth in the fourth quarter, with AI server revenue expected to increase quarter on quarter.

In the third quarter, revenue for its cloud and networking business, which includes AI servers, exceeded that from smart consumer electronics – such as iPhones – for the second quarter in a row.

For its full-year revenue, Foxconn also forecasts significant year-on-year growth, in line with previous guidance given in August.

It did not elaborate, and the company does not provide numerical guidance for its full-year or quarterly outlook.

Most of the iPhones that Foxconn makes for Apple are assembled in China, but the bulk of those sold in the US are now produced in India.

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The company is building factories in Mexico and Texas to make AI servers for Nvidia.

Foxconn has also been looking to expand its footprint in electric vehicles (EVs), which the company sees as a major future growth generator, though that has not always gone smoothly.

In August, Foxconn said it struck a deal to sell a former car factory at Lordstown, Ohio, for US$375 million, including its machinery, that it purchased in 2022 to manufacture EVs.

Foxconn’s shares have surged by 36 per cent so far this year, outperforming the broader Taiwan index’s 21 per cent gain.

Its shares closed up by 1.8 per cent on Wednesday, ahead of the earnings release. REUTERS