Taiwan tech giant Foxconn's 2024 profit misses forecasts

Taiwanese tech giant Foxconn reported on Friday a lower-than-expected net profit for 2024 as consumer electronic gadgets underperformed, although demand for its artificial intelligence servers remained robust.

The world's largest contract electronics manufacturer has been moving beyond assembling devices such as Apple's iPhones into areas ranging from electric vehicles to AI servers.

The company said full-year net profit rose seven percent to NT$152.7 billion (US$4.6 billion).

That compares with an average forecast of NT$159.4 billion, according to a Bloomberg News survey of analysts.

Full-year revenue rose 11 percent to NT$6.9 trillion, beating the market forecast of NT$6.8 trillion.

Foxconn, also known as Hon Hai Precision Industry, has been riding a wave of global demand for generative AI in recent years.

The company reported a "strong performance" in its AI server business, with revenue up 150 percent, according to documents released ahead of an earnings call with analysts.

This year would be the "Year of AI", the company said, with shipments increasing in every quarter.

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The earnings announcement comes as US President Donald Trump imposed tariffs against major trading partners including China, Canada and Mexico, igniting trade wars and causing markets to fall.

While Foxconn has plants around the world, the bulk of its operations is based in China, which has been hit by 20 percent levies on products shipped to the United States.

Foxconn is building a mega-AI server plant in Mexico, which a local official told Bloomberg recently would be completed in a year despite Trump's tariff threats.

The $900 million assembly plant near Guadalajara will become the world's largest to be powered by Nvidia's GB200 AI chips, Jalisco Governor Pablo Lemus Navarro said.

Apple said recently it would team up with Foxconn later this year to begin producing servers that power the cloud components of Apple Intelligence in Houston, Bloomberg reported.

"I think there will be more and more of these projects, and when these projects mature, we will let everyone know," Foxconn chairman Young Liu said in response to a question about the company's plans for further US investment on an online earnings call.

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'Very confident in Apple'

Liu noted that tariffs were "quite a headache" for the chief executives of Foxconn's customers, but he said it was "very, very difficult to predict" how it would unfold.

"We can only wait and see what will happen and do what we can do well. This is Hon Hai's attitude," Liu said.

Foxconn makes most of its revenue from iPhones, whose sales have slipped in markets like mainland China, but Liu brushed aside concerns about the popular gadget.

"We are very, very confident in Apple," Liu said.

"I believe that they will definitely do something in the generative AI area, so we will continue to maintain in-depth cooperation with our client. This will not change."

Foxconn has also been in the spotlight over potential cooperation with Japanese automaker Nissan after its merger talks with rival Honda fell through in February.

Liu previously said Foxconn was open to buying French auto giant Renault's stake in Nissan and was looking into a cooperation with Nissan, not a merger.

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The company has also been looking to expand into the Japanese EV market.

Liu said Friday that Foxconn is expected to sign a contract with a Japanese car maker or makers "within one or two months".

Source: AFP