By Wen-Yee Lee, Yimou Lee and Ben Blanchard
TAIPEI, Nov 12 (Reuters) – Taiwan’s Foxconn, the world’s largest contract electronics maker, said on Thursday it was confident about its business next year given strong AI demand as it reported forecast-beating quarterly profit, but it warned about supply chain tightness.
Net profit for the July to September period for Nvidia’s biggest server maker and Apple’s top iPhone assembler was T$77.5 billion ($2.35 billion), up 34% on year and beating an LSEG consensus estimate of T$69.6 billion.
In an earnings release, Foxconn stuck to its previous forecast of “strong” growth for revenue this year and said it saw strong AI demand throughout this year and into next.
The company, which does not give numeric forecasts, said it predicted “high double digit growth” in 2027 for AI rack shipments.
“We remain very confident about our operations next year and expect continued growth,” Chairman Young Liu told an earnings conference, although warning there were also “several external variables worth continued attention”.
Looking at the AI and consumer electronics supply chains, chips, memory and some key components are currently tight, which is a challenge facing the industry as a whole, Liu said.
“Although supply bottlenecks should gradually ease as new capacity comes online, overall demand is expected to still exceed supply next year, and the tight supply-demand situation may persist for some time,” he said.
Foxconn, formally called Hon Hai Precision Industry, in October reported a 47% year-on-year jump in third-quarter revenue.
Most of the iPhones Foxconn makes for Apple are assembled in China, but it now produces the bulk of those sold in the United States in India. The company is also building factories in Mexico and Texas to make AI servers for Nvidia.
Foxconn has been looking to expand its footprint in electric vehicles as well.
The company’s shares have risen 4% so far this year, underperforming a 49% gain on the broader Taiwan index.
Foxconn shares closed 0.8% lower on Thursday ahead of the earnings release. The main index ended down 2.6%.
($1 = 32.9740 Taiwan dollars)
(Reporting by Wen-Yee Lee, Ben Blanchard and Yimou Lee; Editing by Tom Hogue)
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