Foxconn, the world’s largest contract electronics manufacturer, has reported an impressive 91% year-over-year surge in net profit for the first quarter of 2025, reaching T$42.12 billion (approximately $1.4 billion USD). This remarkable profit growth far exceeded expectations, surpassing analysts' consensus estimate of T$37.8 billion, and marking a significant rise from T$22.01 billion recorded in the same quarter the previous year.
The primary driver of Foxconn’s exceptional performance was the strong demand for artificial intelligence (AI) servers, a booming sector that has been critical for the company’s growth. As a key assembler of Apple’s iPhones and a major supplier of Nvidia’s AI servers, Foxconn has positioned itself at the heart of the rapidly growing AI infrastructure market. This demand surge for AI-related products, including data servers and computing hardware, has significantly contributed to Foxconn’s overall profitability.
Despite the strong first-quarter results, Foxconn has adjusted its full-year growth forecast. Initially projecting “strong” growth, the company has revised its outlook to “significant” growth, acknowledging challenges posed by global trade tensions, tariff impositions, and currency fluctuations. Foxconn's management has expressed concerns over the impact of U.S. tariffs on Chinese-made components, which have disrupted its supply chain. Additionally, the appreciation of the Taiwanese dollar against the U.S. dollar has put further pressure on revenue, with each NT$1 gain against the U.S. dollar potentially reducing annual revenue by up to 3%.
Chairman Young Liu addressed these concerns in a statement, explaining that while Foxconn remains optimistic about second-quarter growth—particularly driven by AI server production—the company is adjusting its growth expectations due to the aforementioned external economic factors. Despite these challenges, Foxconn continues to benefit from high demand in the AI sector, with expectations of further growth in the next quarter.
In addition to its core electronics business, Foxconn is looking to diversify its revenue streams. The company’s foray into the electric vehicle (EV) sector is a notable development. Foxconn has expanded its efforts in EV production through its subsidiary, Foxtron, which has already partnered with Mitsubishi Motors and is exploring further collaborations with Nissan. This diversification aims to position Foxconn as a major player in the EV manufacturing industry, which is expected to see considerable growth in the coming years.
While Foxconn’s performance is undeniably strong, the company faces ongoing challenges in the form of global economic volatility. The revised outlook signals caution as it prepares for a more turbulent second half of the year, influenced by factors such as shifting trade policies and currency risks. The company’s ability to maintain momentum in the AI server market and its ongoing expansion into new sectors, such as electric vehicles, will be crucial to its continued success.
Foxconn’s record Q1 profit highlights the growing global demand for AI infrastructure and underscores the company’s pivotal role in the tech industry’s supply chain. However, the revised growth forecast serves as a reminder of the external economic challenges that even industry giants like Foxconn face. As the company adapts to evolving market conditions, its diversification strategies and strong foothold in the AI sector will likely help it navigate these challenges and secure long-term growth.