Foxconn, the world’s largest contract electronics maker, said it has recorded its highest revenue for any third quarter to date, as manufacturers meet increasing demand for AI servers in the wake of Google’s rollout of neural networks. The company reported revenues of $57.3 billion for Q3, an increase of 20.2 percent compared to the same quarter last year. Much of that growth was driven by ever-growing demand around the globe for AI infrastructure, including AI servers and cloud computing equipment-the latter growing more and more necessary to companies in all sectors as they expand their capabilities in AI.
The shift in revenue sources for Foxconn was particularly interesting, because the company has long been a manufacturer of consumer electronics and is actually best known as the world’s largest assembler of Apple iPhones. But demand for AI servers trumped that from iPhones during this quarter. A greater sense of need for AI technology arises from still more dominant fields originating from cloud computing, which requires advanced hardware to support execution of workloads by firms like Nvidia, a key client of Foxconn.
Such strategic focus on AI-related products has enabled Foxconn to top market expectations by not only meeting them but surpassing the same as well. Specifically, the demand for equipment and servers in cloud networking is fueled by a rise in investments by the tech giants in AI. And such a trend should sustain itself because AI servers would comprise a higher percentage of total income from Foxconn in the future. Foxconn generated over T$733 billion in revenue just in September, the second-largest figure in company history for a single month with strong momentum heading into Q4.
Such prospects Foxconn’s top management is optimistic regarding its future, especially as the world enters into increasingly AI-based solutions. The company expects this upward trend to level into the fourth quarter in line with market expectations. Consumer electronics such as iPhones have flat performances compared to last year, however it has improved prospects for diversification into AI servers and cloud computing hardware.
This comes ahead of Foxconn’s annual Tech Day scheduled for early October where the company will announce new partnerships and innovations in AI and other emerging technologies. Earnings for the full third quarter will be reported mid-November, and industry analysts also expect a higher growth as Foxconn widens further into the AI market.
Foxconn’s success tells a much bigger story of a sector-wide shift towards AI, cloud computing, and data infrastructure. Foxconn has actually gained 86% from its stock price, as per the article, as its parent company in Taiwan has its overall tech sector value increase by 24%. This could easily turn into a new benchmark for the contract manufacturers which must look into taking huge leaps forward on the AI revolution. As the use of AI deepens into global business operations, Foxconn’s position in the in-demand field ensures that it will stay relevant and at the top for many more years to come.
