Foxconn Q1 earnings surge on AI data server demand, but tariffs dampen forecasts

Foxconn (Hon Hai Precision Industry) reported that net profit for the January–March quarter jumped 91% year on year, reaching T$42.12 billion (US$1.39 billion) supported by a strong demand for AI data servers. This easily outpaced the T$37.8 billion average forecast of 13 analysts surveyed by LSEG.

The Taiwanese electronics contract manufacturer said it experienced robust orders for AI data servers, which helped drive quarterly revenue up by 24.2%, its strongest showing for a first quarter on record.

Foxconn is expanding global footprint, but cautious about US tariffs

Despite the cheering results, Foxconn’s chairman, Young Liu, cautioned investors that looming US tariff threats could weigh on future performance. US President Donald Trump slapped Taiwanese goods with a 32% tariff before bottling it with a 90-day delay. While Washington and Beijing recently agreed to a 90-day truce on new duties, the pause falls short of a comprehensive trade deal, leaving the company vulnerable to potential tariff hikes that could hamper its China-based assembly operations.

Foxconn’s stock has already slumped 11.4% year to date, well below the broader Taiwan index’s 5.4% decline, reflecting market jitters over protracted trade tensions.

However, in a bid to diversify its production base, Foxconn is building a large manufacturing facility in Mexico specifically to assemble Nvidia AI servers, shielding part of its supply chain from escalating tariff frictions.

At the same time, most of the iPhones Foxconn produces for Apple will continue to roll off assembly lines in China, underscoring the company’s deep ties to the world’s second-largest economy.

On its Q1 earnings call, Foxconn reaffirmed expectations for “high double-digit” year-over-year growth in AI server volumes during the April–June period, thanks to an accelerating ramp-up in production capacity.

Foxconn is also looking at diversification into electric vehicles

Beyond semiconductors and smartphones, Foxconn is actively pursuing growth in the electric-vehicle (EV) sector. Its subsidiary, Foxtron Vehicle Technologies, established in partnership with Yulon Motor, last week signed a memorandum of understanding with Mitsubishi Motors to design and manufacture a new EV model in Taiwan.

While non-binding, the MOU marks Foxconn’s first major contract in the competitive auto industry. The EV is slated to hit the Australian and New Zealand markets in the second half of 2026. Foxconn has also previously signaled interest in taking a stake in Nissan to forge deeper automotive partnerships.

Although tariff and geopolitical headwinds persist, Foxconn’s leadership remains upbeat about its diversified strategy. The firm has declined to issue precise numerical guidance, but it projects “significant on-year growth” in Q2, driven chiefly by AI server shipments.

Its foray into EVs and potential alliances with established automakers signal management’s intent to broaden revenue streams beyond its core electronics assembly business. The full implications of these moves will become clearer when Foxconn hosts its next conference call at 3 p.m. Taipei time.