Forget Foxconn the iPhone factory. AI’s made it a server-slinger first and foremost
Next: Modular datacenters ready to host rack-scale systems, to meet endless demand
Manufacturer to the stars Foxconn is building so many AI servers that they’re now bringing in more cash than consumer electronics – even counting the colossal quantity of iPhones it creates for Apple.
The Taiwanese company revealed the shift in its Thursday announcement of Q2 results, which saw revenue grow 16 percent to NT$1.79 trillion ($59.73 billion) and operating profit rise 27 percent to NT$56.6 billion ($1.9 billion).
AI is not just a passing fad, but a true industrial revolution. It is a structural, long-term growth trend.”
CEO Kathy Yang told investors the company’s Cloud and Networking Products division delivered 41 percent of total revenue, up nine percent compared to Q2 2024, and surpassing the company’s Smart Consumer Electronics unit for the first time. The latter business includes Foxconn’s work for Apple.
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Yang said growth in Cloud and Networking Products was all about servers. Sales of AI servers grew 60 percent year over year. The CEO predicted Q3 will see revenue from AI servers grow 170 percent, and sales of server racks will grow by 300 percent. Foxconn expects full-year revenue from AI servers to top NT$1 trillion ($33 billion).
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“With the gradual increase in volume of AI server racks and the continued strong demand for general-purpose servers this year, we expect this product category to maintain strong growth and remain our largest revenue driver this year,” she said.
She thinks the party is far from over.
“Several major clients have recently emphasized … that investments in AI infrastructure will continue to expand,” Yang said. “We believe that these related capital expenditures are expected to continue through 2026 and beyond. These signals represent and reinforce our view that AI is not just a passing fad, but a true industrial revolution. It is a structural, long-term growth trend.”
The CEO thinks she can handle increasing demand, too.
“I believe the development trend of modular data centers will help accelerate the shipment of AI server racks,” she said.
Yang would say that because Foxconn recently teamed with a company called TECO to make such datacenters. No wonder she also told investors that Foxconn thinks it can increase its AI server market share.
World War Fee
Yang also addressed the issue of the USA’s new trade policy and the tariffs it’s imposed, telling investors “I believe the real challenge lies not in the tariffs themselves, but in the volatility of these policies.”
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“This puts a real test on companies' ability to respond quickly. Manufacturing, unlike other industries, cannot be simply relocated. Global layouts require advance planning, not a wait-and-see approach,” she added.
But she’s not worried that tariffs will derail Foxconn.
“In the long run, while tariffs will pose certain challenges, they also provide us with opportunities to accelerate the optimization of our layout for the global supply chain,” she said. “As we expand into new markets and serve a wider range of customers, I believe this presents a challenge and also creates long-term development opportunities. Overall, we are confident that we can transform this challenge into a competitive advantage.” ®