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Foxconn Sees AI Boom Driving 2026 Growth, Hints at OpenAI Collaboration

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Foxconn, the world’s largest contract electronics manufacturer and key supplier to Apple and Nvidia, projected strong growth from artificial intelligence (AI) demand heading into 2026 — and teased a major announcement with OpenAI next week.

Chairman Young Liu told investors on Wednesday that the AI industry was only in its early stages and would soon become a central driver of global technology growth.
“Judging from what we see now, I am very optimistic about the AI market next year,” Liu said during the company’s quarterly earnings call. “The development of AI is still just beginning.”

Foxconn’s cloud and networking division, which includes AI server manufacturing, has now surpassed its consumer electronics segment — which includes iPhones — for the second consecutive quarter.

The company expects significant year-on-year revenue growth in the fourth quarter, with AI server sales continuing to rise quarter-on-quarter. Third-quarter profit jumped 17% to T$57.67 billion ($1.89 billion), beating analyst expectations.

Liu also hinted at an OpenAI-related announcement to be revealed during Foxconn’s annual Tech Day in Taipei next week, but declined to provide further details. OpenAI has not yet commented on the matter.

Foxconn — formally known as Hon Hai Precision Industry — has benefited from a global data center expansion led by Amazon, Microsoft, and Google, as they ramp up investments in AI infrastructure.

Beyond AI, Foxconn continues to invest in electric vehicles (EVs), despite recent challenges in its EV manufacturing ventures in the U.S.

So far this year, Foxconn’s shares have risen 36%, outperforming Taiwan’s broader market index, which is up 21%.

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 Says It Can Adapt Production to Trump Tariffs

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Foxconn, the world’s largest contract electronics manufacturer and Apple’s primary iPhone maker, announced that it can adjust its production strategy to accommodate potential new U.S. tariffs. This statement was made by Foxconn Chairman Young Liu on Wednesday during a press briefing at the company’s headquarters in New Taipei, Taiwan.

The announcement comes after U.S. President Donald Trump introduced a 25% tariff on all U.S. imports from Mexico and Canada, though the tariff has been paused until March 4. Liu highlighted that Foxconn already operates production facilities in both the United States and Mexico.

“Depending on the tariffs, we will plan different production capacities accordingly,” Liu said. He emphasized that Foxconn is prepared to make necessary adjustments with its U.S.-based partners to meet Trump’s call for more domestic manufacturing.

Liu explained that the company’s flexible global production model minimizes the impact of tariff changes. “For the company, if we don’t manufacture here, we can do it there, so the impact is not too great,” he noted.

However, Liu expressed concern about the broader implications of tariffs, stating that they would not benefit the global economy and could reduce market size.