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Foxconn Cuts Full-Year Outlook Despite AI Boom, Citing Taiwan Dollar Strength and Tariff Risks

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Foxconn, the world’s largest electronics contract manufacturer and a key supplier to Apple and Nvidia, downgraded its full-year growth outlook on Wednesday, pointing to the recent appreciation of the Taiwan dollar and ongoing tariff uncertainties tied to U.S. trade policy.

Although AI server demand remains strong and drove a 91% year-on-year surge in Q1 profit, Foxconn Chairman Young Liu struck a more cautious tone, dialing back earlier projections of “strong growth” for 2025 to a revised outlook of “significant growth.”

💱 Currency & Trade Pressure

  • The Taiwan dollar’s appreciation against the U.S. dollar, possibly linked to unconfirmed Washington-Taipei currency coordination, is impacting Foxconn’s converted revenues.

  • Liu noted the exchange rate issue “may affect the performance of the revenue amount after conversion into Taiwan dollars.”

  • The U.S.-China trade landscape, despite a recent 90-day tariff truce, still weighs heavily on global supply chains. Foxconn’s footprint in China and Mexico exposes it to ongoing tariff volatility.

“Rapid changes in U.S. tariff policies and exchange rate fluctuations add to uncertainty. We are adjusting our outlook accordingly,” said Liu.

⚙️ Growth in AI and Automotive Still Intact

  • AI server revenue expected to grow at high double-digit rates YoY in Q2.

  • January–March revenue rose 24.2% YoY, a record for Q1.

  • Net profit hit T$42.12 billion ($1.39 billion), beating the T$37.8 billion consensus from analysts (LSEG).

  • Nvidia aims to produce $500B worth of AI servers in the U.S. over four years with help from Foxconn and TSMC.

🚗 EV Expansion and Japan Ties

Foxconn is also pushing ahead in electric vehicles:

  • Its EV arm Foxtron signed an MOU with Mitsubishi Motors last week.

  • Talks continue with Japanese automakers — including possible cooperation with Nissan, though no formal stake has been announced.

“There is some progress with Japanese firms, but nothing to disclose yet,” said Liu.

📉 Market Reaction & Outlook

  • Foxconn shares are down 11.4% YTD, underperforming the Taiwan index (down 5.4%).

  • Shares rose 3.2% on Wednesday ahead of the earnings call, buoyed by strong AI server results but tempered by macroeconomic caution.

While Foxconn’s AI and EV sectors remain growth pillars, currency dynamics and geopolitical frictions—especially with the Trump administration’s aggressive tariff stance—are pushing the firm toward risk-adjusted forecasting in 2025.

Foxconn Surpasses Estimates with Record Third-Quarter Revenue Amid AI Demand Surge

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Taiwan’s Foxconn, the world’s largest contract electronics maker, has reported its highest-ever third-quarter revenue, driven by strong demand for artificial intelligence (AI) servers. The company, which is the primary assembler of Apple’s iPhones, saw its revenue soar by 20.2% year-on-year, reaching 1.85 trillion Taiwanese dollars (T$) ($57.3 billion), surpassing market expectations.

Foxconn’s revenue growth beat the T$1.79 trillion estimate from LSEG SmartEstimate, which weights forecasts from consistently accurate analysts. In its statement, Foxconn highlighted that the results exceeded its own expectations of significant growth.

Strong AI Server Demand Fuels Growth

The significant revenue surge in Foxconn’s cloud and networking products division was largely attributed to growing demand for AI servers, as companies increasingly invest in AI-driven technologies. Foxconn’s client roster includes Nvidia, a leading player in the AI chip market, whose booming demand for servers has contributed to Foxconn’s stellar performance.

Although the company’s smart consumer electronics division, which includes products like iPhones, saw quarter-on-quarter growth due to new product releases, its year-on-year performance remained flat.

Q3 and September Revenue Surge

The third quarter is traditionally a strong period for Taiwan’s technology companies, as they ramp up production of electronics such as smartphones and tablets for major clients like Apple ahead of the year-end holiday season in Western markets. In September alone, Foxconn’s total revenue reached T$733 billion, a 10.9% increase year-on-year, marking the second-highest revenue ever for the month.

Foxconn is optimistic about the fourth quarter, expecting to maintain this momentum. The company hinted that its performance will align with current market expectations but did not provide specific forecasts.

Share Performance and Upcoming Events

Foxconn’s shares have surged by 86% so far this year, far outpacing the broader Taiwan market, which has risen 24%. On Friday, the company’s shares climbed 3.7% ahead of the release of its revenue data, defying the benchmark index’s 0.4% decline.

Foxconn will announce its full third-quarter earnings on November 14, with further insights expected during its annual Tech Day event on October 8-9, where the company typically unveils new products and partnerships.