Foxconn posts record February sales on AI demand

Hon Hai Precision Industry Co., also known as Foxconn, reported its highest-ever February sales of NT$595.8 billion (US$18.9 billion) and said rising demand for AI-related products helped offset fewer working days for the Lunar New Year.

The February figure was up 8.06 percent year-on-year from NT$551.4 billion (US$17.4 billion) in February 2025 and down 18.4 percent from January 2026.

Foxconn said its cloud and networking division rose year-on-year in February, while computing products, electronics components, and smart consumer electronics fell compared with a year earlier due to fewer working days.

Consolidated sales for January and February totaled NT$1.3 trillion (US$42.5 billion), up 21.63 percent year-on-year, and the company said higher orders for AI-related products and electronics components supported the gain.

Foxconn said Q1 sales are likely to beat the previous five-year range as shipments of AI racks grow and smart consumer electronics sales are expected to rise at a better-than-expected pace.

🔗 Source: Focus Taiwan

🧠 Food for thought

Implications, context, and why it matters.

The AI boom is temporarily diluting Foxconn’s profit margins

AI server sales are rising, yet gross margin is under pressure as the mix shifts toward higher-priced systems.
In the second quarter of 2025, Foxconn’s gross profit margin fell to 6.33% from 6.42% a year earlier 1.
The company’s CFO linked the decline to the high unit price of AI server products, which diluted gross profit margin and was described as temporary 1.
Overall profit improved anyway. Operating profit margin rose to 3.16% from 2.88% over the same period, helped by better operating execution 1.

Foxconn is building a new playbook for legacy manufacturers

Recent results align with a broader move beyond contract assembly for consumer electronics brands.
Foxconn aims for its AI server market share to rise above its current 40% level in 2026 2.
Foxconn said it is joining sovereign AI initiatives, which are government-led efforts to build national AI computing infrastructure and keep data plus computing capacity within a country, across the United States, Taiwan, and Japan. It also said it became the first NVIDIA Cloud Partner (NCP) in Taiwan 2.
The shift toward higher-value, more vertically integrated AI solutions offers a path for large manufacturers that want to move away from low-margin contract work. It could also steer supply chains toward integrated technology providers rather than simple build-to-order production 2.