Nvidia supplier Foxconn’s sales soar 24% on AI server boom

Hon Hai Precision Industry Co., better known globally as Foxconn, reported a 24.2% increase in revenue during the first quarter of 2025.  This was driven by explosive growth in AI server demand — a trend largely linked to its role as a key supplier to Nvidia. 

The Taiwanese electronics giant saw its fastest growth since 2022. Total sales amounted to NT$1.64 trillion, or roughly $49.8 billion.

This growth is in line with what analysts had expected. It reflects robust global demand for artificial intelligence infrastructure, particularly from major technology companies like Alphabet (Google’s parent company) and Amazon.

Foxconn manufactures AI servers for Nvidia and assembles iPhones for Apple. With demand for AI services and hardware soaring, companies want powerful servers — and Foxconn is right in the middle of that supply chain.

Foxconn accelerates AI server push amid soaring demand 

Foxconn’s revenue from its cloud and networking segment, which includes AI servers, was the largest driver. These servers are found in the data centers that run AI models and tools.

Foxconn also expects its AI server revenue to exceed NT$1 trillion ($30.29 billion) by the end of 2025. That’d be half of all its internet server income.

The boom is being powered by increasing global AI investment. There is a huge demand for Nvidia’s powerful chips, and companies such as Microsoft, Amazon, and Google are racing to add more AI capacity.

Foxconn is increasing the production of AI server components from its factories in China and Vietnam to satisfy this demand. It is also collaborating closely with Apple on AI-ready server infrastructure in the U.S., including new efforts in Houston.

Chairman Young Liu said the company would ramp up production in several U.S. states. This will allow Foxconn to remain close to American customers and hedge against global politics and trade risks.

A significant concern is the potential return of heavy tariffs. This week alone, U.S. President Donald Trump announced new steep tariffs — 54% on Chinese imports and 46% on goods from Vietnam .

These new levies could directly hurt many of Foxconn’s businesses. Many of its products are manufactured in China and Vietnam, including important components for Apple devices. Analysts say Apple’s recent pivot to Vietnam and India may not soften the blow.

However, there are also signs of strain in the AI sector. Even as it has committed to spending $80 billion for data centers by mid-2026, Microsoft has suspended or delayed server projects in several countries, including the UK, Indonesia, Australia, and parts of the United States. This shift adds another layer of complexity to the price competition.

Now that the Chinese startup DeepSeek has launched a cheaper AI model, there’s an increasing debate over how feasible all this rushing to construct super-expensive AI data centers truly is.

Tariff shockwaves reshape global tech manufacturing strategies

Analysts at CreditSights say the fresh tariffs could be a $100 billion blow to the global tech industry. That extends to hardware makers building servers, PCs, and smartphones.

Bloomberg Intelligence points out that Taiwan, Vietnam, and India have all benefitted from the so-called “China Plus One” strategy, but new U.S. tariffs could be a game changer. Electronics manufacturers such as Foxconn and Quanta could see profit pressure.

Other companies that do a greater share of the manufacturing in the United States — like Jabil and Flex — stand to benefit as American buyers seek alternatives to Asia.

Many Asian manufacturers may now begin building more in Mexico or in the U.S. to remain competitive.

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