Foxconn, whose largest income segment had previously been the consumer electronics market, got an even bigger revenue boost this quarter from the server market, the company’s current top revenue source, accounting for 41% of Foxconn’s total Q2’25 revenue. Nevertheless, consumer electronics remains a strong revenue source, accounting for 35% in Q2.
Foxconn’s early bets on AI are paying off, as the company’s latest financial reports reveal the manufacturer is getting more income from building AI servers than from iPhones. The company has been aware of the danger of depending solely on its largest customer, Apple. As a result, company Chairman Liu Young-way, who came onboard in 2019, has been steering the company into new ventures including servers, electric vehicles, and semiconductors.
Foxconn booth highlighting the company’s profitable partnership with Nvidia. (Source: Foxconn)
It’s interesting that servers have moved into first place for Foxconn’s revenues; readers won’t be one bit surprised to hear that it was Nvidia that helped put them there. So far, the company has yet to see any big moves related to EVs and chips, but, honestly, that’s how traders think. Realistically, major business shifts take time, usually lots of time.
Q2’25 was an exceptional quarter for the company, which reported operating profit- and net profit-setting record high. Revenue was $59.73 billion, an increase of 16% YoY.
Cloud and networking business represented 41% of Foxconn’s total revenue in the second quarter, while consumer electronics accounted for 35%. This marks the first time that Foxconn’s Cloud and Networking Products division was the top earner for the company, overtaking the Smart Consumer Electronics group. In contrast, consumer electronics represented 54% of Foxconn’s revenue in 2021.
Foxconn has partnered with Nvidia since 2002, when it began building reference designs for Nvidia’s graphics cards. And, since 2009, the company has been building general-purpose servers for cloud providers’ data centers. The major cloud companies Amazon, Microsoft, and Google are among Foxconn’s most important customers. Foxconn also manufactures the Kindle for Amazon, computer products for Dell, and gaming consoles for Nintendo and Sony.
Meanwhile, Apple’s sales of iPhones are doing just fine. According to a recent Wall Street Journal report, Apple blew past expectations. Sales of iPhones were up 13.5% to $44.58 billion, considerably beating analyst predictions of $40.22 billion.
In fact, Apple reported its largest revenue growth since December 2021. Overall, Apple reported $94.04 billion, a 10% growth. Sales were boosted as some people moved up purchases to avoid tariffs, but the company has forecasted continued growth for the year.
The shift in Foxconn’s revenues is just one more indicator of the importance of AI in world businesses, but AI isn’t a product, it’s a capability that’s changing all businesses and attracting huge investments.
There’s still time for Foxconn’s bets to pay off in EVs and semiconductors, but when and if they do, AI will be a major component.
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