Foxconn revenue drops 9% despite demand for AI servers

Apple supplier Foxconn has reported 9 percent drop in revenue to NT$1.324 trillion in the first quarter of 2024.
Foxconn at a trade showFoxconn has generated 48 percent of its revenue from consumer electronics including smartphones, while cloud and networking products, including servers, contributed 28 percent of its revenue in the first quarter.

Foxconn, the world’s largest contract electronics maker, said it expects revenue for the second quarter to grow significantly from a year earlier, broadly in line with previous guidance, with revenue for smart computer electronics likely to be flattish. It also forecast demand for consumer electronics to be flat this year. Foxconn does not provide numerical guidance.

Foxconn said revenue from AI servers in the first quarter grew nearly 200 percent compared with the same period last year and is expected to improve with each quarter. General server demand continues to rebound, leading to strong growth in overall servers. Demand for networking products has also begun to rebound.

Foxconn has reported gross profit of NT$83.7 billion (down 5 percent), operating profit of NT$36.8 billion (down 9 percent) and net profit of NT$22 billion (up 72 percent) in Q1.

The 72 percent rise in first-quarter profit was boosted by strong demand for AI servers and coming off a low base from the same period a year earlier.

In a separate statement, Foxconn, whose earnings took a hit last year by a T$17.3 billion ($533.88 million) writedown related to its 34 percent stake in Sharp, reaffirmed its commitment to the Japanese electronics maker.

Foxconn Chairman Young Liu, announcing its financial result, said that the Japanese company’s Sakai factory would be transformed into an AI data centre.

Baburajan Kizhakedath