Taipei — Taiwanese firm Foxconn, the world’s biggest contract electronics maker, offered a bullish outlook on AI-related demand on Wednesday, saying it would be a big driver of 2026 growth, and said it would make an announcement in that regard with OpenAI next week.
Nvidia’s biggest server maker and Apple’s top iPhone assembler has been riding a data centre boom, as cloud computing firms including Amazon, Microsoft and Google spend billions of dollars to expand their AI infrastructure and research capacity.
Speaking on an earnings call, Foxconn chair Young Liu said the importance of AI would increase hugely next year, though the company would also keep a wary eye on geopolitical and currency issues.
“Generally speaking, judging from what we see now, I am very optimistic about the AI market next year,” he said.
Companies announcing multibillion-dollar investments in AI have raised concerns about the formation of a bubble reminiscent of the dotcom boom and bust.
But Liu said the industry was just getting started. “The development of AI is still just beginning,” he said.
In the third quarter, revenue from Foxconn’s cloud and networking business, which includes AI servers, exceeded that of its smart consumer electronics — such as iPhones — for the second straight quarter.
Foxconn forecast significant year-on-year revenue growth in the fourth quarter, with AI server revenue expected to increase quarter on quarter.
It also forecast significant annual revenue growth, in line with previous guidance given in August. The company did not elaborate and does not provide numerical guidance for its outlook.
OpenAI teaser
Foxconn, formally called Hon Hai Precision Industry, will host its annual tech day in Taipei next week.
Liu said there would be an announcement at that event related to ChatGPT creator OpenAI, though he did not provide details.
OpenAI did not immediately respond to a request for comment.
Foxconn reported a forecast-beating 17% rise in third-quarter profit on Wednesday, fuelled by the sustained strength in demand for AI servers.
Net profit for the July-September period was T$57.67bn ($1.89bn), higher than the consensus estimate of T$50.4bn compiled by LSEG.
Crosshead
Last month Foxconn reported better-than-expected third-quarter revenue on strong demand for AI products.
The company is looking to expand its footprint in electric vehicles, which it sees as a major future growth generator, though that has not always gone smoothly.
In August, the company said it would sell a former car factory in Ohio for $375m, including its machinery, which it had bought in 2022 to manufacture electric vehicles.
Foxconn’s shares have gained 36% so far this year, outperforming the broader Taiwan index’s 21% gain.
Its shares closed 1.8% higher on Wednesday before the earnings release.
Reuters
