Taiwanese contract manufacturer Hon Hai Precision Industry Co. Ltd. (Foxconn), a key supplier to tech giants like Apple, has reported record revenue and earnings for the June quarter. This strong performance was driven by booming demand for AI servers, which accounted for over 40% of the company’s total server revenue for the period.
Foxconn’s Q2 earnings per share reached NT$2.53 ($0.08), exceeding the previous year’s NT$2.38 per share. Revenue climbed a significant 19% year-over-year to NT$1.55 trillion, marking a record high for the June quarter. The company also saw impressive growth in gross profit (19%), operating profit (44%), and net profit (6%).
The AI server segment saw a remarkable 60% sequential increase in revenue during the second quarter, highlighting the growing importance of this technology. Looking ahead, Foxconn anticipates continued strong growth, particularly in the traditionally strong third quarter. The company’s Vice President and Spokesperson, James Wu, expects “operations to gradually ramp up entering the traditional peak season.”
Foxconn expects substantial sequential and year-over-year growth in cloud and networking products, driven by the continued momentum in AI servers. While the computing product segment might experience a slight sequential decline due to a high base period, it’s still projected to see significant year-on-year growth.
The company’s outlook for 2024 remains optimistic, with significant growth anticipated due to sustained demand for AI servers. Foxconn maintains its projection that AI servers will contribute to 40% of its overall server revenue this year. Wu predicts that AI servers will soon become Foxconn’s next trillion-dollar revenue product.
In addition to the strong AI server outlook, Foxconn also confirmed that the development schedule for Nvidia Corp.’s GB200 rack is on track. The company is set to be the first supplier to deliver these racks, with shipments expected to begin in the fourth quarter. This could lead to even stronger than anticipated performance in the AI server segment.
Overall, Foxconn’s robust financial results and optimistic outlook reflect the rapid growth of the AI industry and the company’s strategic positioning within this burgeoning market. The company is well-positioned to capitalize on the continued demand for AI servers, making it a key player in the evolving technological landscape.
