AI infrastructure becomes a core growth engine! Foxconn Q2 revenue surges 41% year-on-year, H1 revenue increases 35% year-on-year

Apple's largest contract manufacturer, Hon Hai Precision (parent company of Foxconn), has delivered an impressive Q2 report, confirming that global AI hardware demand remains robust.

On August 12, the latest financial report showed that Hon Hai’s Q2 net profit reached NT$59.97 billion, a year-on-year surge of 35%, and revenue skyrocketed 41% year-on-year to NT$2.53 trillion, significantly exceeding market expectations of NT$2.41 trillion.

Meanwhile, July revenue alone jumped 54.2% year-on-year to NT$946.5 billion, a record high that far exceeded market forecasts for about a 32% gain this quarter.

Hon Hai stated that AI server shipments are expected to maintain momentum this quarter, while information and communications technology products are also entering the peak season. This statement further bolsters external optimism for the company’s third-quarter performance.

Previously, Super Micro Computer and AI computing power provider CoreWeave Inc. both released strong financial reports and optimistic guidance, alleviating market concerns over overinvesting in AI and excess capacity to some extent.

The report also showed that Hon Hai’s cumulative revenue for the first half of the year has reached NT$4.65 trillion, up 35% year-on-year; net profit was NT$109.9 billion, up 27% year-on-year; operating profit surged 65% year-on-year to NT$170.45 billion, and earnings per share rose from NT$6.23 in the same period last year to NT$7.84.

AI Server Demand Becomes Core Driver, July Cloud and Network Business Takes Lead

Hon Hai’s performance has become a key indicator measuring global AI hardware demand. As a primary server manufacturing partner of Nvidia, Hon Hai is deeply tied to the AI data center construction wave—Nvidia chips have become the mainstream choice for the majority of data centers.

Bloomberg analysts Steven Tseng and Rebecca Wang pointed out that the 54% rise in July revenue was led by cloud and network business, with core momentum driven by strong demand for AI servers, showing that the growth trend has extended beyond a single AI track into wider fields, further solidifying market expectations for sales growth to exceed 30% in Q3.

On the AI infrastructure investment side, Alphabet Inc., Meta Platforms Inc., Microsoft, and Amazon, the four main data center players, have pledged nearly $2.4 trillion in AI-related expenditures over the next few years, continuously providing strong order support for upstream hardware suppliers.

Beyond the AI business, Hon Hai also benefits from stable growth in Apple’s smartphone market. As the main contract manufacturer for iPhone, Hon Hai has assembly plants in both China and India, cementing its core position in the global supply chain.

Bloomberg analysts noted that consumer electronics and computing product business also performed strongly in July, driven by the release of seasonal orders and higher sales prices of new iPhones and computing products. As new product launch cycles approach, this segment is expected to provide additional support for Hon Hai’s business in the latter half of the year.

Q2 Revenue and Profit Beat Expectations Across the Board

Hon Hai’s Q2 revenue of NT$2.53 trillion not only marked a staggering 41% year-on-year increase, further accelerating from the 35% growth in H1, but also signals that the industry’s upcycle is rapidly materializing in the second half of the year.

More notably, profit elasticity was remarkable—Hon Hai achieved operating profit of NT$94.8 billion in Q2, a 68% year-on-year leap, far surpassing market expectations of NT$80.53 billion. This demonstrates Hon Hai’s simultaneous improvement in operating efficiency and profitability during scale expansion.

This also shows the company is benefiting from profit leverage driven by economies of scale, with a rising share of high-margin AI server product portfolios playing an important role.

The company also issued an upbeat forward guidance, expecting Q3 revenue to continue growing year-on-year and maintaining the forecast for revenue growth in fiscal year 2026.

Hon Hai’s management clearly stated in the report that AI infrastructure is driving the company’s performance growth and they hold a “strong” outlook for the future of AI servers.

The company also expects significant year-on-year growth in revenues from components and other products in Q3, implying that AI server-related component orders have high visibility, providing strong support for continued performance improvements in the second half of the year.