Foxconn earned more from AI servers and cloud equipment than from consumer devices

Taiwan’s Foxconn (2317.TW) core business is no longer centered on Apple (AAPL.O). The company, best known for assembling millions of iPhones, now earns more from making AI servers and other cloud and networking equipment, work that includes major orders for Nvidia (NVDA.O).

Foxconn’s mix shift became clear in the second quarter, when revenue from those products surpassed income from smart consumer devices for the first time.

The milestone caps a transition that began years ago and has spread across Taiwan’s tech sector according to Reuters.

For Foxconn, investors had long viewed its heavy exposure to smartphones as a key risk, as growth in new iPhone demand has slowed since the first model launched nearly two decades ago. The world’s top iPhone assembler has felt that cooling momentum, analysts say.

Since taking over in 2019, Chairman Young Liu has pushed Foxconn to widen its reach, backing AI servers, electric vehicles, and semiconductors. The EV and chip bets have yet to add meaningfully to revenue.

By contrast, the server push, especially for AI systems, has paid off as cloud providers race to build computing capacity. Foxconn moved early, before the technology drew broad attention with the arrival of ChatGPT in late 2022.

Foxconn maintains strong position in server market

The company’s sales breakdown shows the turn. Consumer electronics made up 35% of total revenue in the second quarter. Cloud and networking, which include servers, accounted for 41%. Back in 2021, consumer electronics were 54% of revenue. The numbers underline a business that is steadily tilting away from handsets and toward data center hardware.

Those early, cautious investments helped Foxconn build a prized relationship with Nvidia and other big AI customers, analysts say.

“The company has been in the business for years, meeting higher quality requirements, diversifying assembly and operations across sites, and pursuing vertical integration,” said Ming-Chi Kuo, an analyst at TF International Securities.

Foxconn’s history in the field stretches back two decades. It began producing reference designs for Nvidia graphics cards around 2002.

By about 2009, it was building general-purpose servers for cloud service providers’ data centers. The current AI server work with Nvidia, analysts say, is a natural outcome of that long track record.

Today, Foxconn says it ranks among the world’s largest suppliers of both general-purpose and AI servers, with a market share near 40% in each category. Its approach often includes putting capital to work earlier than peers, according to Kuo. He pointed to past investments for Apple and similar moves for Nvidia. “In long-term partnerships, Foxconn is more willing to take the initiative,” he said.

Planned factories in Houston, Texas, part of Nvidia’s $500 billion U.S. investment plan, and in Mexico to make AI servers for the U.S. customer reflect that strategy, analysts say. Looking ahead, Foxconn expects AI server revenue to rise more than 170% in the third quarter from a year earlier.

Foxconn’s pivot is part of a wider change in Taiwan’s technology industry

Firms once focused on consumer devices, Foxconn on iPhones, and companies like Quanta Computer (2382.TW) and Wistron Corp (3231.TW) on notebooks, are now channeling more resources into AI servers.

The results are showing up in sales. Nvidia partner Wistron reported revenue growth of 92.7% for January to July.

Quanta posted a 65.6% rise over the same period. “The monthly sales jump for Taiwan ODMs in the first half of 2025 is evidence of this trend,” said Robert Cheng, head of Asia technology hardware research at BofA Global Research, referring to original design manufacturers that build products for clients.

Chris Wei of Taiwan’s Market Intelligence & Consulting Institute said the fast shift was helped by Taiwan’s supply chain, which has worked with U.S. tech giants on data-center gear for about 10 years. He estimates Taiwan ships about 80% of all servers and over 90% of AI servers.

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