Foxconn is also reaping the benefits of the AI ​​boom – profits jumped 14% thanks to AI servers

Foxconn, the world’s largest contract electronics manufacturer from Taiwan and Apple’s main iPhone assembly partner, reported a significant increase in quarterly financial results for the third quarter of 2024. The company also reported record revenue in October and forecast revenue growth in the fourth quarter. The driver of growth was AI servers, which next year should provide half of the company’s revenue in this segment, reports Reuters.

Image source: Foxconn

A key supplier to Apple and Nvidia, Foxconn reiterated its forecast for “significant growth” in sales for 2024 and said artificial intelligence (AI) servers will account for 50% of its total server revenue next year. In addition, large-scale construction has begun on a plant in Mexico where Nvidia GB200 superchips will be produced, a key component for the Blackwell architecture.

The company’s third-quarter revenue reached 1.85 trillion New Taiwan dollars (NT$), or about $56.71 billion, up 20% from a year earlier. Operating profit rose 19% to NT$54.8 billion ($1.68 billion), and net profit rose 14% to NT$49.3 billion ($1.51 billion). Earnings per share (EPS) amounted to NT$3.55 ($0.11), which was also a record for the third quarter. In the first nine months of 2024, Foxconn’s revenue reached NT$4.7 trillion ($144.06 billion, +10% year-on-year), and net profit reached NT$106.4 billion ($3.26 billion, +20% year-on-year) year).

At the same time, gross profit of NT$114.7 billion ($3.52 billion) rose 12% year-on-year. “Despite the impact of product mix on margins in the third quarter, absolute gross, operating and net profit margins increased year-over-year due to Foxconn’s competitive advantage across the business,” said Chief Financial Officer David Huang.

Image source: Foxconn

In turn, Foxconn President and Chairman Young Liu said that the company will focus on five main areas of activity: artificial intelligence, semiconductors, Smart Manufacturing (smart manufacturing), Smart EV (smart electric vehicles) and Smart City (smart city). ). According to Liu, the company is also well positioned to maintain its leading position in the AI ​​server segment, the market for which can continue to develop rapidly, especially since revenue from this area in the first three quarters of 2024 grew by more than 200% compared with the same period last year.

Overall, Foxconn expects significant growth by the end of 2024. The company considers the key success factors to be strong global demand for AI servers, the development of new business areas and the active introduction of artificial intelligence technologies into its own production. “In the long term, with the advantage of Foxconn’s global presence and new business development opportunities, our Wisconsin and Texas plants will benefit in the areas of AI and servers, and the Ohio electric vehicle plant will continue to attract new customers,” Yang Liu said.