Foxconn Technology Group, the world’s largest contract electronics manufacturer and primary iPhone assembler, today announced a record-breaking third-quarter revenue of NT$2.057 trillion (approximately $67.71 billion). Despite the year-on-year growth of 11%, the figure narrowly missed the T$2.134 trillion consensus forecast, highlighting a mixed financial picture driven by diverging performance across its core business segments and macroeconomic headwinds.
The AI Server Boom Drives Overall Growth
The primary engine for Foxconn’s record top line was its Cloud and Networking Products division, which includes the increasingly critical business of manufacturing Artificial Intelligence (AI) servers. As a major supplier for companies like Nvidia, Foxconn has strategically capitalized on the unprecedented global demand for AI infrastructure.
- Revenue Surge: Strong demand for AI products led to robust growth for the Cloud and Networking Products segment, solidifying its position as a key growth driver for the company.
- Strategic Pivot Pays Off: The substantial revenue from this division underscores the success of Foxconn’s shift away from an over-reliance on its traditional consumer electronics segment toward higher-margin, specialized hardware.
The Headwind: FX and Smart Consumer Electronics
The factor that primarily dampened the overall revenue performance, causing the company to miss market expectations, was the pressure on its Smart Consumer Electronics business the division responsible for assembling products like the iPhone.
- Foreign Exchange Impact: The company cited exchange rate fluctuations as the key element affecting the segment’s performance. The strengthening of the New Taiwan Dollar against major currencies like the US Dollar during the quarter made its export revenue less valuable when converted back into the local currency.
- Segment Decline: As a result of these currency effects, the Smart Consumer Electronics business posted a slight year-on-year revenue decline. This weakness partially offset the substantial gains made in the AI server market.
Outlook and Macro Caution
Foxconn remains optimistic about the near-term outlook, expecting sequential quarterly growth in the fourth quarter, driven by two main factors: the continued ramp-up of AI server shipments and the traditional peak season for ICT products ahead of year-end holidays.
However, the company’s forward-looking statement included a clear note of caution regarding external factors. Foxconn stated that the impact of the global political and economic situation and exchange rate fluctuations will need continued close monitoring, indicating that currency volatility remains a significant risk for future earnings and guidance.
The full third-quarter earnings report, which will provide details on profit and net income, is scheduled to be released on November 12.
