Foxconn: Apple supplier Foxconn profits down by 1%, eyeing growth in EVs, AI

A booming artificial intelligence sector has helped the Taiwan-based contract electronics manufacturer Foxconn to beat its second-quarter forecasts. However, the company reported a 1% drop in Q2 net profit as global economic issues affect the demand for smart consumer electronics.

According to a report by Reuters, the average forecast made by analysts claimed that the company will earn 25.57 billion Taiwanese dollars (T$) as profit in Q2 2023.

Whereas, the company was able to beat the forecast and book a profit of T$33 billion ($1.0 billion). In contrast, Apple’s biggest supplier generated a revised profit of T$33.29 billion in Q2 2022.
Foxconn’s prediction for the next quarter
The company said that the revenue for its smart consumer electronics products is expected to slightly decline in the third quarter. This product category includes smartphones which account for nearly half of Foxconn’s total revenue.
Why Foxconn is ‘cautious’ about the future
The company’s chairman Liu Young-way said, “At present, there are many external variables: global monetary policy tightening, geopolitical tensions, inflation and other uncertainties.” He also described Foxconn’s outlook as “relatively cautious”.
Apart from this, Liu also noted that the company sees a lot of potential in India, where it has rapidly expanded its manufacturing facilities. “Several billion dollars in investment is only a beginning,” he added.

Foxconn pulled out of a joint venture with Vedanta to make semiconductors in India in July. However, the country assured that it intends to apply for incentives under the country’s chip production plan.
Foxconn’s upcoming ventures
Moreover, Foxconn is also eyeing the growing electric vehicles (EV) contract manufacturing market. The company said that it is likely to mass produce electric vehicle batteries at its troubled site in Wisconsin, US. However, Foxconn didn’t share any details about the project.
Manufacturing of EVs is a major part of the company’s diversification plans. Foxconn has also hired a former Nissan executive, Jun Seki, to lead its EV business expansion.
Liu also noted that Foxconn has won a “very high” market share for GPU modules and substrates within the AI server supply chain. As generative AI applications expand, the company is reportedly gaining momentum in servers for this segment
Foxconn also believes that it can widen collaboration with North American customers to offer a bright spot amid slower demand for smartphones and PCs.
“AI growth has been strong, but we have not seen any pick-up for other products,” Liu added.