Foxconn forecasted its AI server sales will surpass NT$1 trillion (US$33.03 billion) in 2025.

Chairman Young Liu highlighted strong global demand for AI technologies during an investor conference.

He noted significant AI server orders and plans to expand operations in the Middle East. This includes collaborations with Saudi Arabia in AI servers, EV charging, and IT development

The company reported over 50% growth in AI and general server revenue year-on-year for Q1 2025.

It plans to start delivering AI servers with Nvidia’s GB series GPUs to North American cloud providers in Q2.

Foxconn holds a 40% share of the global AI server market and aims to grow further, focusing on India, Vietnam, Mexico, and the U.S.

The company operates 223 facilities in 24 countries and expects capital expenditure to increase by over 20% this year, with 60-70% allocated for expansion.

🔗 Source: Focus Taiwan

🧠 Food for thought

1️⃣ Hon Hai’s business model pivots from consumer electronics to AI infrastructure

Hon Hai’s strategic shift represents one of the most significant business transformations in the technology manufacturing sector.

The company reported that smart consumer electronics now make up just 40% of total sales, down from 51% in Q4 2024, while cloud and networking devices have increased to 34% of revenue 1.

This transformation reflects a major pivot for a company long known primarily as Apple’s manufacturing partner, with returns on invested capital declining from 23% in 2016 to 11% in 2023 as its traditional business faced challenges 2.

The company’s Q1 2025 results validate this strategic direction, with net profit soaring 91% year-on-year to NT$42.11 billion despite a stronger Taiwan dollar, driven primarily by AI server demand 1.

Hon Hai’s pivot demonstrates how manufacturers can successfully transition from maturing product categories to emerging technologies, with AI server revenue expected to exceed NT$1 trillion in 2025 and grow more than 50% in the following year 3.

2️⃣ Geographic diversification emerges as critical strategy against currency and trade risks

Recent Foxconn developments