Foxconn’s AI servers surpass iPhones in Q2 revenue for the first time

Foxconn, a major Taiwan-based electronics manufacturer, reported that its cloud and networking business, including AI servers for clients like Nvidia, surpassed its consumer electronics segment for the first time in Q2 2025.

Consumer electronics, including iPhones, made up 35% of Foxconn’s Q2 revenue, while cloud and networking accounted for 41%, down from 54% for consumer electronics in 2021.

Foxconn has increased its focus on AI servers and data center products in response to slowing smartphone demand, with the company saying it now holds nearly 40% market share in both general-purpose and AI server markets.

The company plans new factories in Houston and Mexico to supply AI servers for Nvidia as part of a broader US investment push.

Foxconn expects its AI server revenue to rise more than 170% year-on-year in Q3.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Early strategic bets in unglamorous markets can yield massive returns during tech shifts

Foxconn’s current AI server dominance stems from investments made decades before the recent AI boom became mainstream.

The company began producing reference designs for Nvidia’s graphics cards around 2002 and started making general-purpose servers for cloud service providers as early as 2009, long before ChatGPT sparked widespread AI interest in late 20221.

This 20-year relationship building paid off dramatically when AI server demand exploded, with Foxconn now claiming nearly 40% market share in both general-purpose and AI servers1.

The timing advantage is reflected in Foxconn’s financial results. The company reported a 27% profit surge in Q2, with net income reaching NT$44.36 billion ($1.5 billion), driven primarily by AI server demand2.

Consumer electronics, which represented 54% of Foxconn’s revenue in 2021, dropped to just 35% by the second quarter of this year, while cloud and networking business jumped to 41% of total revenue1.

2️⃣ Taiwan’s entire tech ecosystem is capitalizing on decades of server manufacturing expertise

The shift at Foxconn reflects a broader transformation across Taiwan’s technology sector, where companies are leveraging existing relationships with U.S. tech giants to capture AI infrastructure demand.

Other major Taiwanese manufacturers are seeing similar explosive growth. Wistron’s revenue for January to July rose 92.7%, while Quanta Computer grew 65.6% in the same period1.