Taiwanese Foxconn, the world’s largest contract manufacturer of electronics, is forecasting strong sales growth in the first quarter after an unexpected 13 percent drop in fourth-quarter 2024 profit.
Foxconn, whose products include iPhones for Apple and AI servers for Nvidia, posted a net profit of 46.33 billion Taiwan dollars ($1.41 billion) for October-December. This is lower than analysts’ average estimate. That came in at 54.4 billion Taiwan dollars. The decline was the first since the second quarter of 2023, when profits fell 0.9%. As recently as January of this year, Foxconn expected October-December sales to have risen 15.2% to a record high thanks to strong sales of AI servers.
The company, formally known as Hon Hai Precision Industry, said Friday that consumer electronics sales are likely to grow significantly in the first quarter and that sales of cloud and networking products will rise sharply. Exact figures were not shared.
Impact of global trade war
An escalating global trade war complicates the outlook. Foxconn has major manufacturing sites in China and Mexico, two key U.S. trading partners facing increased import tariffs under U.S. President Donald Trump’s administration.
Apple recently reported building a new server factory in Houston. This facility of more than 23,000 square feet should open in 2026 and will produce servers used in data centers to power Apple Intelligence. Apple explains that these servers are still manufactured outside the United States. To realize this new location, the tech company will partner with Foxconn.
Own LLM
Foxconn is also exploring new categories. It is launching FoxBrain to enter the competition in the AI world. Developed with Nvidia technology, FoxBrain aims to transform the manufacturing industry and supply chains.
Read more: Foxconn unveils FoxBrain: competition for DeepSeek