Foxconn has relied heavily on Apple and iPhone assembly for years, but that balance is changing quickly as demand for AI servers becomes a much larger part of its business. In the latest quarter, the division that includes the iPhone accounted for less than 29% of Foxconn’s revenue.
The change does not mean Foxconn is making fewer iPhones, because the company is still Apple’s main assembly partner and continues to operate huge production facilities, including its well-known Zhengzhou plant in China. Instead, Foxconn is earning much more money from cloud and networking products, especially AI servers.
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TNW reports that Foxconn’s cloud and networking division generated 51% of total revenue during the three months ending in June, marking the first time that business has contributed more than half of the company’s quarterly revenue.
AI servers are becoming Foxconn’s main growth engine
Foxconn expects this shift to continue rather than reverse over the coming quarters. Rotating chief executive Michael Chiang told analysts that cloud investment will become the company’s most important growth driver over the next few years.
The trend also extends to other major Apple suppliers, with TSMC seeing strong demand for advanced packaging used in AI chips. Market expectations suggest its CoWoS capacity will grow by more than 50% next year.
However, investors remain cautious because of concerns about excessive spending across the AI industry. Foxconn shares have gained about 17% this year, while Taiwanese stocks overall have risen roughly 57%, showing that investors are still weighing the risks behind the company’s growing dependence on AI infrastructure.
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