Foxconn’s Q2 profit rises on AI server demand; limited shipments of new Nvidia chips starting in Q4

Foxconn Technology (OTCPK:FXCOF) beat expectations with a 6% increase in second quarter net profit driven by a strong demand for AI servers, and maintained its full-year revenue outlook of growing significantly.

The Apple (AAPL) supplier – which is formally known as Hon Hai Precision (OTCPK:HNHAF) (OTCPK:HNHPF) – said it would start shipping a small volume of servers containing Nvidia’s (NVDA) next-generation chips in the fourth quarter, which would increase further in early 2025.

The servers contain GB200, or a Grace processor bundled with the upcoming Blackwell graphic processing unit, as per a report from Bloomberg News.

Foxconn Vice President and Spokesperson James Wu said that the development schedule of the GB200 rack is on track and that the company will definitely be the first supplier to deliver.

The shipments are expected to start in the fourth quarter, Wu added.

Foxconn’s second quarter net profit (attributable to the owners of the parent company) grew 6% year-over-year to NT$35.05B. The numbers beat analysts’ estimate of T$34.29B, as per a report from Reuters.

Second quarter’s revenue soared 19% year-over-year to NT$1.551T, reaching a record high for the period. Quarter-over-quarter it jumped 17%.

The company said AI servers contributed to more than 40% of its server business in the second quarter.

Outlook:

Wu said that strong sequential growth is expected in the third quarter for smart consumer electronics, where new product preparations are underway.

Wu added that cloud and networking products will turn in significant growth, when compared to the previous quarter and the same period a year ago, due to ongoing revenue momentum in AI servers.

However, computing products is expected to decline slightly due to a high base period, but still see significant growth year-on-year, according to Wu.

Wu said strong demand for AI servers is expected to continue.

He noted that the outlook for sequential quarterly growth this year in AI server revenue remains unchanged.

For the full-year 2024, Foxconn said that due to the strong demand for AI servers, the outlook for significant growth was unchanged, but with better visibility.

The company maintained its view that AI servers will contribute to 40% of overall server revenue this year.

Wu noted that strong demand for new-generation AI rack solutions should make a significant contribution to Foxconn’s server revenue in 2025.