Foxconn, the world's largest contract electronics maker, is set to announce a notable 11% increase in second-quarter profit on Thursday. This growth is fueled by strong demand for artificial intelligence servers, boosting net profit to an estimated T$38.8 billion ($1.30 billion), up from T$35.05 billion a year ago, according to LSEG's consensus estimate.
The company, also known as Hon Hai Precision Industry, recently revealed record revenue for the second quarter due to the high demand for AI products. However, Foxconn remains cautious about potential geopolitical and exchange rate challenges that may impact its performance. Despite concerns, the extension of the tariff truce between the U.S. and China for 90 days offers some stability.
While most iPhones for Apple are manufactured in China, Foxconn has increased production in India. The company is also expanding its manufacturing presence in Mexico and Texas to cater to the rising demand for AI servers, especially from Nvidia.
Looking ahead, Foxconn anticipates on-year growth in the third quarter, although the company refrains from providing specific numerical guidance. The impact of global political and economic conditions remains a key consideration for its future performance.
In a strategic move to diversify its business, Foxconn has ventured into the electric vehicle market, viewing it as a significant growth sector. Additionally, recent deals to sell a former car factory in Lordstown, Ohio, and partner with TECO Electric & Machinery demonstrate the company's commitment to aligning with its strategic priorities.
Concurrently, Foxconn is scheduled to host its earnings call in Taipei on Thursday, providing updates on its outlook for the year. The company's shares have already surged by 7.9% this year, outperforming the broader Taiwan index's gain of 5.8%.
