Riding the AI wave, Foxconn shifts focus from iPhones to servers, reshaping its role in global tech supply chains.
Foxconn, the Taiwanese tech giant known as Apple’s iPhone assembler, has seen its revenue from AI servers and cloud products surpass its earnings from smartphones for the first time. The shift, recorded in the second quarter, underscores the company’s pivot away from heavy reliance on Apple and into new growth sectors fueled by the global AI boom.
Foxconn’s cloud and networking division, which includes AI servers for Nvidia and other major clients, accounted for 41% of revenue in Q2. Consumer electronics, including iPhones, contributed 35%. Just two years ago, consumer electronics made up more than half of Foxconn’s total revenue, highlighting the pace of the transformation.
The move away from iPhones has been a deliberate strategy under Chairman Young Liu, who has championed diversification since 2019 amid slowing global smartphone demand. While Foxconn’s ventures into electric vehicles and semiconductors are still nascent, its AI server manufacturing has taken off thanks to early investments in Nvidia partnerships and server design expertise dating back to 2009.
Analysts credit Foxconn’s long-term strategy of building trust with key clients. “The company has been in the business for years, meeting higher quality requirements, diversifying operations, and pursuing vertical integration,” said Ming-Chi Kuo of TF International Securities. Foxconn today claims a nearly 40% global market share in both AI and general-purpose servers.
The company is now investing further, with plans to build AI server factories in Houston, Texas, as part of Nvidia’s $500 billion US investment initiative, and in Mexico to serve US clients. It expects AI server revenue to grow more than 170% year-on-year in the third quarter.
