Foxconn's Profit Grows 6% Due to AI Demand

Foxconn, the world's largest contract electronics manufacturer and a key supplier for Apple, announced a 6% increase in its net profit for the second quarter of 2023, attributed to robust demand for AI servers. The company's net profit for the April-June period reached 35.05 billion New Taiwan dollars ($1.09 billion), surpassing analysts' expectations and marking the fourth consecutive quarter of profit growth. This performance reflects the ongoing technology boom, particularly in the AI sector. The company revealed that AI servers constituted over 40% of its server business during the second quarter, highlighting the impact of its next-generation AI computing solutions on its financial results. Despite a forecast of flat revenue from smart electronics, including smartphones, Foxconn had anticipated significant overall revenue growth compared to the previous year. Looking ahead, Foxconn expects a gradual improvement in operations during the second half of the year, as many electronics vendors, including Apple, typically launch new products in preparation for the holiday season. This seasonal uptick is expected to bolster the company's performance further. In a pre-earnings report, KGI Securities raised its sales forecast for Foxconn, citing strong demand for new iPhones and AI servers. This optimistic outlook suggests that the company is well-positioned to exceed expectations in the latter half of the year, driven by the ongoing technological advancements and product launches.