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Foxconn Sees AI Driving Growth as Q2 Profit Exceeds Forecast

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Foxconn (2317.TW), the world’s largest iPhone assembler, reported second-quarter net profit of T$44.4 billion ($1.48 billion), surpassing the consensus estimate of T$38.8 billion, as strong demand for AI servers helped offset slower growth in smart electronics. The company on Thursday forecast a significant rise in third-quarter revenue, with AI server sales expected to jump more than 170% year-on-year.

Cloud and networking products, including servers, accounted for 41% of Q2 revenue, while smart consumer electronics contributed 35%. CEO Kathy Yang said, “AI has been the primary growth driver so far this year,” but cautioned that “close attention is needed due to the impact of changes in tariffs and exchange rates.”

Foxconn is increasing capital spending by more than 20% in 2025 to expand server production capacity at its facilities in Texas and Wisconsin. The company’s AI business benefits from rising demand as cloud computing giants such as Amazon (AMZN.O), Microsoft (MSFT.O), and Google (GOOGL.O) expand AI infrastructure.

Geopolitical uncertainty remains a risk, particularly from U.S.-China trade tensions, although a 90-day tariff truce has been extended. While most iPhones for Apple (AAPL.O) are assembled in China, production for the U.S. market has shifted mainly to India. Foxconn is also building factories in Mexico and Texas to manufacture AI servers for Nvidia (NVDA.O).

In its electric vehicle (EV) operations, Foxconn sold its former Lordstown, Ohio, factory for $375 million but will continue to occupy the site to produce cloud-related products. Initial production of its Model C EV for the U.S. market will take place in Taiwan.

Foxconn shares have risen 8.4% year-to-date, outperforming the broader Taiwan index (.TWII), which gained 5.2%, and closed up 0.5% on Thursday ahead of the earnings release.

SoftBank Acquires Foxconn’s Ohio EV Plant to Support Stargate AI Infrastructure Project

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SoftBank Group Corp (9984.T) is purchasing Foxconn Technology Group’s (2317.TW) electric vehicle manufacturing plant in Ohio to further its ambitious Stargate project aimed at building extensive AI data center infrastructure across the United States, Bloomberg News reported on Friday. The Stargate initiative, unveiled by U.S. President Donald Trump in January, represents a private sector investment potentially reaching $500 billion, with backing from SoftBank, OpenAI, and Oracle (ORCL.N).

SoftBank reportedly faced challenges in its financial planning for Stargate and sought Foxconn’s involvement to facilitate the development of data centers and related infrastructure, leading to the acquisition. The Ohio facility is expected to be repurposed as a data center site. Reuters could not independently confirm the report; SoftBank declined to comment, and Foxconn did not immediately respond.

The Stargate Project aims to generate over 100,000 jobs across the U.S., aligning with national goals to boost AI infrastructure and domestic technological capacity.

Nissan Eyes Foxconn EV Production to Prevent Oppama Plant Closure

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Japan’s Nissan Motor is reportedly in talks with Taiwan’s Foxconn to allow the electronics giant to manufacture electric vehicles (EVs) at Nissan’s Oppama plant in Yokosuka, south of Tokyo. This move could potentially save the factory from closure amid Nissan’s broad restructuring efforts.

Background:

Nissan CEO Ivan Espinosa announced plans to restructure the company, including closing seven out of 17 factories worldwide and cutting the workforce by roughly 15%. The Oppama plant, which employs about 3,900 workers, was among those considered for shutdown.

Potential Deal:

  • Allowing Foxconn to produce EVs at Oppama could help avoid the plant’s closure, preserving jobs and supporting local suppliers.

  • Foxconn is also reportedly considering acquiring a portion of the Oppama facility.

  • In May, Mitsubishi Motors, Nissan’s junior partner, signed a memorandum with a Foxconn subsidiary for Foxconn to supply an EV model.

Official Statements:

Nissan said the Nikkei report on the talks was not based on information officially released by the company. Foxconn did not respond to requests for comment.