Taiwan’s Foxconn reports 35 per cent rise in Q2 profit on AI demand, beats forecasts
Net profit for Foxconn in the second quarter was NT$59.97 billion (S$2.38 billion).
Taiwan’s Foxconn, the world’s largest contract electronics maker, announced on August 12 a 35 percent increase in second-quarter profit, surpassing analyst estimates. This surge in earnings is largely attributed to the continued robust demand for artificial intelligence (AI), which Foxconn predicts will drive growth throughout 2026.
The company's net profit for the April to June period amounted to NT$59.97 billion (S$2.38 billion), exceeding the LSEG consensus estimate of NT$58.8 billion and contrasting with NT$44.4 billion in the same period last year. In a statement following the earnings release, Foxconn's rotating CEO, Michael Chiang, reiterated its forecast of "strong" growth for revenue in 2026, attributing this growth to the escalating demand for AI.
The company's cloud and networking products segment, which encompasses AI servers, accounted for 51 percent of second-quarter revenue, marking the first time it has exceeded the 50 percent threshold. Smart consumer electronics products, including iPhones, contributed 29 percent to the revenue. Chiang anticipates that AI-related business performance will continue to surge in the third quarter, alongside ICT products entering their peak season in the second half of the year, thereby paving the way for significant quarter-on-quarter and year-on-year growth.
In terms of Foxconn's manufacturing capabilities, Chiang disclosed that AI server racks would enter mass-production preparation in the third quarter, with shipments slated to commence in the fourth quarter. He further highlighted that the production volumes of these AI server racks would gradually escalate over the forthcoming quarters, with the Vera Rubin server products expected to become a major product the following year.
However, Chiang cautioned that the ultimate performance of the AI server rack market in 2027 hinges on the availability of Chip on Wafer on Substrate (CoWoS) capacity, an advanced packaging technology developed by Taiwan Semiconductor Manufacturing Company (TSMC) utilized in AI chip production. CoWoS capacity, according to Chiang, is poised for more than 50 percent growth next year, contingent upon the supply of chips.
Foxconn's capital expenditure is expected to continue its upward trajectory, projecting a 30 percent surge in 2026 compared to 2025. In July, the company reported a 40 percent year-on-year jump in second-quarter revenue. While most of the iPhones manufactured by Foxconn for Apple are assembled in China, the bulk of these iPhones now produced for the United States market are being made in India.
In addition, Foxconn is constructing factories in Mexico and Texas to produce AI servers for Nvidia. The company has also been exploring opportunities for expansion in the electric vehicle sector. Foxconn's shares have surged 17 percent so far in 2026, trailing the broader Taiwan index's 57 percent gain. At the time of the earnings release on August 12, Foxconn shares closed 2.7 percent higher.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
