Foxconn Q2 profit rises 35% to NT$59.97 billion on Nvidia AI server demand

Foxconn (TPE: 2317) posted a net profit of NT$59.97 billion for the second quarter, up 35% from a year ago and beating analyst forecasts of NT$58.8 billion.

The company forecast AI demand would spur growth this year.

Cloud and networking cleared half of Foxconn’s revenue

The Taiwanese company, formally Hon Hai Precision Industry, is the largest server manufacturer for Nvidia (NASDAQ: NVDA) and the main assembler of iPhones for Apple (NASDAQ: AAPL).

Net profit in the April-June period was NT$59.97 billion, or about $1.86 billion, compared with an LSEG consensus of NT$58.8 billion and NT$44.4 billion a year earlier. Cryptopolitan reported the year-ago figure was a 27% gain.

Cloud and networking products, the segment that includes AI servers, made up 51% of revenue in the second quarter. This is the first time it has breached 50%.

Smart consumer electronics, the segment that includes iPhones, made up 29%. In July, Foxconn reported a 40% year-on-year increase in revenue in the second quarter.

In its earnings release, Foxconn reiterated its earlier guidance of “strong” revenue growth this year. The company does not provide numeric guidance.

“AI-related business performance will continue to grow in the third quarter. Combined with ICT products entering their peak season in the second half of the year, we expect significant quarter-on-quarter growth and strong year-on-year growth,” said rotating CEO Michael Chiang.

Vera Rubin racks ship in the fourth quarter

Foxconn makes the latest Vera Rubin server products from Nvidia. Those racks are in the mass-production prep phase in the third quarter and shipments begin in the fourth.

“We expect production volumes to increase gradually over the next several quarters, and it (Vera Rubin) will become our major product next year,” Chiang said.

Customer demand remains forceful, but the key thing to watch for in the AI server rack market next year, Chiang said, will be how much CoWoS capacity chip companies can get.

CoWoS, or Chip on Wafer on Substrate, is an advanced packaging technology TSMC developed for AI chip production. Foxconn customers, including Nvidia, lean heavily on TSMC, and tight capacity has constrained the technology amid booming AI demand.

“The market currently expects CoWoS capacity to grow by more than 50% next year, but how much of that can ultimately be translated into shipments of next-generation AI server racks will depend on chip supply,” Chiang said.

Foxconn sees capital expenditure rising 30% in 2026. It’s building factories in Mexico and Texas to make AI servers for Nvidia, and it’s worked to expand its presence in electric vehicles.

Foxconn shares closed at NT$270.00 on Wednesday ahead of the earnings release, up 2.66% from the previous close of NT$263.00. Over the last 52 weeks, the stock has fluctuated between NT$187.50 and NT$314.00.