What happened
Foxconn reported a 17% increase in quarterly profits, reaching NT$56.596 billion ($1.89 billion) in operating profit, driven by AI server demand. The company projects a 170% year-over-year revenue increase in AI servers for the current quarter, with AI servers now comprising over 40% of its server business. Fourth-quarter revenue surged 15.2% to T$2.13 trillion ($64.72 billion). Foxconn anticipates significant year-on-year growth for early 2025, though geopolitical factors and tariff uncertainties present potential challenges.
Why it matters
This shift towards AI server manufacturing by a key supplier introduces a tightened dependency on Foxconn's production capacity and geopolitical stability for organisations relying on AI infrastructure. Procurement and platform operations teams face increased exposure to potential supply chain disruptions and price volatility, raising due diligence requirements for sourcing and inventory management. The concentration of AI server manufacturing within a few key players creates an operational constraint, increasing the burden on strategic planning and risk management to mitigate potential impacts from external factors like tariffs.
