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Foxconn to Report Higher Q4 Profit Driven by AI Server Demand

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Foxconn, the world’s largest contract electronics manufacturer, is expected to announce on Friday a 2.35% rise in its fourth-quarter profit, driven by robust demand for artificial intelligence (AI) servers. Net profit for the period from October to December is anticipated to reach T$54.4 billion ($1.65 billion), according to a consensus estimate of 15 analysts, up from T$53.15 billion in the same period last year.

In January, Foxconn reported a 15.2% increase in fourth-quarter revenue, reaching a record level for that quarter, with much of the growth attributed to AI server sales. The company, officially known as Hon Hai Precision Industry, has forecast stronger-than-average performance for the first quarter, predicting substantial year-over-year growth, though it has refrained from offering specific financial guidance.

However, the company’s outlook remains clouded by the ongoing global trade war, which poses challenges for Foxconn as it operates major manufacturing facilities in China and Mexico—two countries that have faced increased import tariffs from the U.S. under President Donald Trump.

In addition, Apple announced last month that it would collaborate with Foxconn to build a 250,000-square-foot facility in Houston, which will assemble servers designed for data centers that power Apple Intelligence.

Despite these gains, Foxconn’s shares have dropped 8.7% this year, largely due to concerns over trade policies and the effects of U.S. tariffs.

The company’s earnings call will take place at 3 p.m. in Taipei (0700 GMT) on Friday, during which it will provide an update on its outlook for the remainder of the year.

SAP Sees Rising Demand for Sustainability Software Amid U.S. Climate Policy Shift

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SAP, the German enterprise software company, is witnessing growing global demand for software solutions that help companies manage and track their sustainability efforts, despite the U.S. government’s weakening commitment to climate protection. SAP’s Chief Financial Officer, Dominik Asam, shared in an interview with Reuters that the company is seeing heightened interest in sustainability software, particularly its Green Ledger tool, which is designed to provide verifiable sustainability reporting similar to a financial balance sheet. Asam emphasized that despite the U.S. decision to withdraw from the Paris climate agreement by 2026, the importance of sustainability will remain central to investor discussions.

Asam pointed out that many investors he spoke with at the World Economic Forum in Davos remain optimistic about sustainability, even in light of recent U.S. elections. He believes companies will continue to rely on accurate data and analytical tools to drive decisions related to sustainability. SAP’s Green Ledger software is poised to play a key role in this ongoing trend, particularly with upcoming regulations like the European Corporate Sustainability Reporting Directive (CSRD), which will require companies to provide such reporting by 2028.

While SAP’s Green Ledger software is primarily being used by chemical company Covestro, Asam anticipates a surge in adoption, with more contracts expected in the second half of the year. SAP sees a major growth opportunity in this space as businesses strive to comply with increasing sustainability reporting requirements worldwide.

 

India’s Path to Becoming a Semiconductor Powerhouse Faces Challenges, but Collaboration is Key

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India is making bold strides toward establishing itself as a global semiconductor powerhouse, aiming for self-reliance in manufacturing. Prime Minister Narendra Modi has set ambitious goals, targeting a leap in the country’s electronics sector from $155 billion today to $500 billion by 2030. However, experts are divided on whether this target is feasible, with a consensus that India cannot achieve it on its own.

Eri Ikeda, assistant professor at IIT Delhi, highlights that India’s semiconductor journey is still in its early stages. Taiwan leads global semiconductor production with 44% market share, followed by China (28%) and other key players like South Korea and the U.S. Collaborative efforts are already in motion, such as Taiwan’s Powerchip Semiconductor partnering with Tata Electronics to build India’s first wafer fab in Gujarat, and American chipmaker Micron Technology planning to produce semiconductors in India by 2025.

India’s drive for semiconductor self-reliance is partly fueled by its growing role as a viable alternative to China for global supply chains. However, analysts caution that India must first learn the nuances of the semiconductor industry. Rishi Bhatnagar of the Institution of Engineering and Technology suggests that India should focus on collaboration rather than direct competition with China, which continues to invest heavily in semiconductor equipment from the U.S. and Japan.

India is strengthening ties with the U.S. to diversify its semiconductor sources. The U.S. Department of State has partnered with India’s Semiconductor Mission to bolster global semiconductor value chains, further fueled by geopolitical tensions with China. As a democratic nation with a growing English-speaking workforce, India is positioned as an attractive investment destination for tech giants like Apple and Google.

While infrastructure and investment challenges remain, India has advantages such as a low labor cost and a young workforce. The country is also making significant improvements in its infrastructure, with plans to modernize highways, railways, and airports. These developments are crucial as India positions itself to cater to the increasing global demand for semiconductors.

Despite the hurdles, optimism persists. Analysts see India’s potential to meet global chip demands while maintaining lower production costs, offering a competitive edge over China. Samir Kapadia, CEO of India Index, emphasizes India’s unique combination of economic stability, workforce potential, and infrastructure development, making it a strong contender in the global semiconductor race.