Foxconn AI Servers Overtake iPhones as Revenue Share Hits 41%

Foxconn, a global contract manufacturing leader, has seen a pivotal shift in its revenue mix during the second quarter of 2025, with its AI servers and cloud equipment segment overtaking income from consumer electronics, including iPhones. This milestone reflects a long-term strategic pivot under Chairman Young Liu, who has steered the company toward high-growth areas such as artificial intelligence infrastructure and cloud computing [1]. The transformation marks a decisive break from Foxconn’s historical reliance on Apple products, which once formed the backbone of its business [2].

The revenue breakdown for the quarter shows that cloud and networking equipment, which includes AI servers, accounted for 41% of Foxconn’s total income, while consumer electronics contributed 35%. This shift underscores a broader industry trend as companies increasingly prioritize data center and AI infrastructure over traditional consumer devices [3]. The rise in AI server demand, driven by the rapid adoption of generative AI and machine learning technologies, has positioned Foxconn as a key player in the market [4].

Foxconn’s strategic move into AI servers can be traced back over two decades, when the company began producing reference designs for Nvidia graphics cards around 2002. By 2009, it had already started building general-purpose servers for cloud service providers, setting the stage for its current leadership in both AI and general-purpose server manufacturing [5]. Today, the company is estimated to hold nearly 40% market share in both categories [6]. Analysts attribute this success to Foxconn’s willingness to take early and substantial investments in emerging technologies, a pattern seen in its prior deep partnerships with Apple and now with Nvidia [7].

The company has also expanded its physical footprint in key markets to support this new business direction. Plans include new factories in Houston, Texas, and Mexico to produce AI servers for U.S. clients, aligning with a $500 billion investment initiative led by Nvidia [8]. Looking ahead, Foxconn expects AI server revenue to grow by more than 170% in the third quarter compared to the same period in 2024 [9].

Foxconn is not alone in this shift. Across Taiwan’s tech industry, companies that once focused primarily on consumer electronics are now redirecting resources toward AI and data center hardware. For instance, Wistron, a major AI server manufacturer and Nvidia partner, reported a 92.7% revenue increase for January to July 2025, while Quanta posted a 65.6% rise over the same period [10]. These figures highlight the broader trend of contract manufacturers adapting to the surging demand for AI infrastructure.

The transformation within Foxconn’s business model is also reflected in its recent financial performance. In the second quarter, the company reported a 27% year-over-year increase in profits, which exceeded expectations and demonstrated the strong demand for AI servers from cloud providers and data center operators [11]. In support of its long-term strategy, Foxconn has sold off certain traditional manufacturing assets and is now focusing on expanding its AI and cloud-related ventures [12].

The evolving landscape of global technology manufacturing indicates that AI infrastructure is becoming a central pillar for contract manufacturers seeking to maintain long-term competitiveness. As the demand for AI servers continues to rise, companies like Foxconn are well-positioned to capitalize on this trend, provided they continue to adapt and scale their capabilities in line with market needs [13].

Source:

[1] Foxconn ditches iPhone dependence in AI-driven shift (https://www.cryptopolitan.com/foxconn-ditches-iphone-dependence/)

[2] Foxconn's AI Server Business Overtakes IPhones For The First Time (https://finimize.com/content/foxconns-ai-server-business-overtakes-iphones-for-the-first-time)

[3] Foxconn sees robust AI demand as second-quarter profit rises (https://www.aol.com/news/ai-demand-expected-boost-electronics-220200234.html)

[4] Foxconn sees AI server demand growing after Q2 profit soars (http://www.msn.com/en-us/money/companies/foxconn-sees-ai-server-demand-growing-after-q2-profit-soars/ar-AA1KvgCq)

[5] Foxconn began producing reference designs for Nvidia graphics cards around 2002 (https://coinmarketcap.com/community/articles/68a2fe450305013001d8e237/)

[8] Foxconn to build AI server factories in Texas and Mexico (https://www.forbes.com/sites/johnwerner/2025/08/17/foxconn-sells-ohio-plant-and-will-oversee-ai-server-production-there/)

[11] Foxconn reports 27% year-over-year profit increase in Q2 2025 (https://cryptorank.io/news/feed/c9763-nvidia-partner-foxconn-reports-strong-surge)

[13] Foxconn sees robust AI demand continuing after Q2 profit tops forecast (https://www.msn.com/en-us/money/markets/foxconn-sees-robust-ai-demand-continuing-after-q2-profit-tops-forecast/ar-AA1KveHv)