Foxconn Reports Q2 2023 Financial Results and Unveils Strategic Initiatives

Foxconn, the global electronics manufacturing giant, has released its second-quarter financial results for 2023, showcasing both challenges and advancements across various sectors.
Foxconn at a trade showDespite a 14 percent decline in revenue, Foxconn’s strategic moves in the AI server, electric vehicle (EV), and space Internet industries have garnered attention and promise for the company’s future.

In Q2 2023, Foxconn reported a total revenue of NT$1.3045 trillion, reflecting a 14 percent drop compared to the same period last year. The company’s gross profit stood at NT$83.6 billion, down 14 percent, while operating income witnessed a steeper decline of 30 percent, totaling NT$30.9 billion. Net profit showed more resilience, sliding by a marginal 1 percent to NT$33.0 billion.

Despite the revenue challenges, both gross profit margin and net profit margin improved slightly from the previous year, reaching 6.41 percent and 2.53 percent, respectively. However, the operating profit margin saw a decrease to 2.37 percent, down from 2.94 percent in the same period a year ago. Earnings per share (EPS) landed at NT$2.38, a decrease of NT$0.02 from the prior year.

In the realm of artificial intelligence (AI) servers, Foxconn’s Chairman Liu detailed the company’s approach to the market. The company has positioned itself as a unique player in this sector, offering a complete solution spanning GPU modules, substrates, AI servers, racks, advanced cooling solutions, and AI data centers.

Chairman Liu emphasized Foxconn’s dominant market share in GPU modules and substrates, underscoring the company’s pivotal role in the AI server industry value chain.

Chairman Liu also highlighted Foxconn’s dedication to technological advancement, particularly in energy consumption and heat dissipation technologies. The company’s commitment to modular design and energy-efficient cooling solutions has yielded impressive results, with its advanced cooling systems showcasing better Power Usage Effectiveness (PUE) performance than the industry average.

Turning to the EV sector, Chairman Liu disclosed Foxconn’s ongoing collaborations with over 10 customers on 20 electric vehicle projects. Production has commenced for two projects, and contracts with five more are imminent. Notably, mass production for the family SUV MODEL C, developed by Foxtron Vehicle Technologies, remains on track for Q4 2023. More revelations in the EV domain are anticipated during Foxconn Tech Day on October 18.

In an unexpected move, Foxconn announced a groundbreaking partnership with Microsoft pertaining to low Earth orbit (LEO) satellite systems. The collaboration aims to create a space-based Internet solution, targeting applications in the Internet of Vehicles, smart cities, and B5G communication infrastructure. This alliance leverages Foxconn’s CDMS, Microsoft’s Azure Space technology, and ground station services, with the intent of fostering satellite system development in conjunction with countries in the Belt and Road Initiative.

Expanding its footprint within India, Foxconn revealed plans to establish operations in Karnataka and Telangana states, in addition to its existing presence in Andhra Pradesh and Tamil Nadu. Through collaboration with local and central governments, the company seeks to establish industrial parks and optimize business environments, facilitating growth through improved infrastructure, policies, and regulations.

Furthermore, Foxconn reaffirmed its commitment to the BOL (Build, Operate, and License) strategy in Southeast Asia, with Vietnam, Thailand, and Indonesia as focal points. By fostering local partnerships and sharing global resources, the company aims to bolster indigenous competitiveness, expand markets, and achieve mutual success.

With a mixed Q2 performance but a slew of strategic moves in diverse sectors, Foxconn continues to navigate a dynamic global landscape, promising innovation and adaptation for its shareholders and customers alike.