Apple supplier Foxconn’s Q2 profit rises 6% thanks to AI boom

Apple supplier Foxconn reported on Wednesday a 6% rise in second-quarter net profit, driven by strong AI server demand as the company touted “strong growth momentum” from the technology boom.

The Taiwanese company, the world’s largest contract electronics maker, said net profit for the April-June quarter rose to T$35.05 billion ($1.09 billion) from T$33 billion in the same period the previous year.

That beat analysts’ average estimate of T$34.29 billion.

It was the firm’s fourth consecutive quarterly profit rise.

The company said AI servers accounted for more than 40% of its server business in the second quarter, saying its next generation AI computing solution has brought “strong growth momentum.”

Foxconn had previously expected revenue for the second quarter to grow significantly from a year earlier, although revenue from smart computer electronics including smartphones was likely to be flattish.

The company, formally called Hon Hai Precision Industry Co Ltd, has expected its operations to pick up gradually in the second half as many electronics vendors including Apple usually release new products ahead of the year-end holiday season.

In a report prior to the earnings announcement, Taipei-based KGI Securities revised up its sales forecast for Foxconn this year, saying strong demand for new iPhones and AI servers were likely to lead to a better-than-expected outlook for the firm in the second half.