By Wen-Yee Lee and Yimou Lee
TAIPEI (Reuters) -Taiwan’s Foxconn,the world’s largest contract electronics maker, said on Friday that solid demand from its tech clients would drive strong revenue growth in the first quarter.
The upbeat forecast contrasts with a cautious note struck by many other businesses, rattled by U.S. President Donald Trump’s tumultuous trade policy, and underscores that booming demand for artificial intelligence is not over yet and would further drive 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 told analysts on a conference call.
He said AI servers would account for more than half of the company’s total server revenue this year, as it expands production for Nvidia.
“For the first quarter, we expect AI server revenue to grow by more than 100%, both quarter-over-quarter and year-over-year,” Liu said.
Foxconn, which also makes iPhones for Apple, booked an October-December net profit of T$46.33 billion ($1.41 billion), missing the T$54.4 billion average of 15 analyst estimates compiled by LSEG. Net profit declined by 13% compared to T$53.15 billion in the same period a year earlier.
The profit decline was Foxconn’s first since the second quarter of 2023, when it fell 0.9%, and largely stemmed from an investment loss in Japan’s Sharp and currency exchange losses. Foxconn did not provide a breakdown of its non-operating income and expense account.
In January, Foxconn said October-December revenue jumped 15.2% to a record for that quarter on strong AI server sales.
The company, formally Hon Hai Precision Industry, said on Friday that first-quarter revenue from consumer electronics is likely to grow significantly and that sales from cloud and networking products would grow strongly, without giving numerical guidance.
It expects its first-quarter performance to be better than the average level of the past five years.
Analysts’ average estimate for Foxconn’s first-quarter net profit is T$43.56 billion, according to an LSEG SmartEstimate drawn from 15 analysts. That would represent a 98% increase from the same period a year ago.
An escalating global trade war has complicated prospects as Foxconn has a major manufacturing presence in China and Mexico, two of the biggest U.S. trading partners facing increased import tariffs under Trump’s administration.
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