Foxconn has broken the silence on President Donald Trump’s tariffs and is predicting disruption and perhaps an expansion of US manufacturing by big tech in the coming years.
A Taiwanese manufacturing partner for iPhone maker Apple and Amazon, Foxconn CEO Young Liu made the remarks that are reportedly uncharacteristic of an executive in a rare public admission of the disruptions caused by President Trump’s “erratic” trade policy.
Foxconn will feel the impact of the trade policies
When asked about the impact of tariffs, the executive didn’t dance around the matter but indicated the blunders associated with the trade policy and their knock-on effect on the tech industry.
While the company has plants around the world, most of its operations are based in China, which has been slapped with a 20% levy on products shipped to the US.
“The issue of tariffs is something that is giving the CEOs of our customers a big headache now.”
Liu.
“Judging by the attitude and the approach we see the US government taking towards tariffs, it is very very hard to predict how things will develop over the next year. So we can only concentrate on doing well what we can control,” Liu said.
This comes after Liu in February said the world’s largest contract electronics manufacturer can plan its production around the new US tariffs.
Speaking to reporters at the company’s headquarters in Taipei at the time, Liu said, “Depending on the tariffs, we will plan different production capacities accordingly.”
President Trump wants companies to manufacture in the US and Foxconn will make relevant arrangements with its partners in the country, according to Liu.
Liu had to caution investors
Today, the CEO also took the opportunity to caution investors that manufacturing demand might be an issue, as ultimately tariff costs are passed onto the customers by importing companies. Apple will keep Foxconn’s revenues stable for at least a year, but the matter is complex and fluid.
“Under the uncertainties related to geopolitics and tariffs, manufacturing will face challenges and demand might also suffer.”
Liu.
Beyond Apple, Liu did not give any real context to the US. Briefly answering a question posed by an investment firm, Liu said that multiple customers were “one after another” working on plans to cooperate with Foxconn in the US.
However, there were no details to share, as plans have not been finalized, and may not come to fruition.
Foxconn already has one expensive manufacturing boondoggle in the US. Under the first Trump administration, ground was broken in June 2018 after a round of massive financial incentives inspired Apple’s partner to build an LCD factory in Wisconsin.
The facility remains mostly empty, after gutting acres of farmland and residential areas to break ground. In 2021, Foxconn signed a new contract, in which it promised to invest up to $672 million and create 1,454 jobs by the year 2025, Farr more favorable terms for the manufacturer than the original deal signed in 2017.
It is not clear where that deal stands now, in March 2025. Foxconn signed a deal to produce server components for Google at the facility, but the vast majority of that work is still performed overseas.
Production for that deal has likely moved or will move to a new facility in Mexico. According to a report by the Financial Times on Friday morning, the company is building a facility there to build Nvidia Blackwell servers.
In February, the CEO said, “For the company, if we do not manufacture here, we can do it there, so the impact is not too great.”
However, he added that tariffs overall will not be good for the world economy and will shrink markets.
Foxconn missed profitability forecasts, remained confident about Apple
Meanwhile, the Taiwanese tech giant’s profitability missed targets as it reported a lower-than-expected net profit for 2024 on the back of subdued consumer electronic gadgets.
However, demand for AI servers remained solid. For the October to December period, net profit came in at NT$46.33 billion ($1.41 billion) as the company missed the NT$54.4 billion average of 15 analyst estimates compiled by LSEG.
While net profit fell by 13% during the period, Foxconn is however upbeat of a rebound this current quarter. The profit decline recorded during the quarter to December 31, 2024, was the company’s first since the second quarter of 2023 when it went down 0.9% due to an investment loss in Japan’s Sharp and currency exchange losses.
Foxconn revealed that full-year net profit jumped 7% to NT$152.7 billion or $4.6 billion, which compares with an average forecast of NT$159.4 billion, as per a Bloomberg News survey of analysts.
According to the company, full-year revenue jumped 11% to NT$6.9 trillion exceeding market projections of NT$6.8 trillion.
The firm derives most of its revenue from iPhones, whose sales were depressed in markets like mainland China. However, Liu brushed aside worries 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,” added Liu.
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