Catenaa, Monday, August 18, 2025- Foxconn will no longer assemble iPhones for Apple as its main business, as it takes advantage of the AI boom to diversify its income.
Its revenue from making AI servers and other cloud and networking products, including for major customer Nvidia, surpassed smart consumer products such as iPhones for the first time in the second quarter, marking the culmination of a shift that began years ago and has swept through Taiwan’s tech industry.
Foxconn’s heavy reliance on the smartphone business has long been viewed by investors as a significant risk, as demand growth for new iPhones has gradually weakened since they were first introduced nearly two decades ago, leaving the top iPhone assembler grappling with slowing sales momentum, analysts said.
Wary of the risk, Foxconn Chairman Young Liu has been championing new businesses such as AI servers, electric vehicles and semiconductors since taking the top job in 2019.
While its expansion into EVs and chips has yet to show a meaningful contribution to its topline, Foxconn’s success in AI server manufacturing, the company is Nvidia’s biggest server maker, is the result of its early bets before the technology was thrust into the limelight with the advent of ChatGPT in late 2022.
Consumer electronics accounted for 35% of Foxconn’s total revenue in the second quarter, while the cloud and networking business represented 41%. In 2021, consumer electronics represented 54% of its revenue.
Foxconn began producing reference designs for Nvidia’s graphics cards around 2002 and started making general-purpose servers for cloud service providers’ data centres as early as around 2009. Its AI server business with Nvidia is in many ways the culmination of that history, analysts said.
Foxconn says it is now one of the world’s largest suppliers of both general-purpose and AI servers, with a market share of nearly 40% in each.
Foxconn’s plan to build factories in Houston, Texas, part of Nvidia’s $500 billion US investment plan, and in Mexico to produce AI servers for the US client underscores this strategy, analysts said.
Foxconn now expects its AI server revenue would grow more than 170% in the third quarter year-on-year.
Apple stock rose 0.1% on Monday Morning; the stock is down by 7.5% so far this year.
