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Foxconn's Revenue from Apple Falls Below 29% as AI Server Production Surges
Key points
- Apple revenue share for Foxconn dropped below 29%.
- AI server production now constitutes 51% of Foxconn's revenue.
- This change is considered a permanent structural shift.
- Investors show concern despite Foxconn's stock increase.
Shift in Revenue Composition
Foxconn, a primary assembler for Apple's iPhones, has seen the proportion of its revenue from Apple fall to under 29% in the most recent quarter. Historically, Apple-related business accounted for more than half of Foxconn's total revenue.
Rise of AI Server Manufacturing
The decline in Apple's revenue share is attributed to Foxconn's growing involvement in AI server production. The company's cloud and networking division, responsible for AI servers, now generates 51% of its revenue, marking the first time this segment has exceeded half of the total.
Permanent Structural Change
Foxconn's rotating chief executive, Michael Chiang, stated that this shift is structural and permanent, not cyclical. He indicated that cloud investment, particularly in AI servers, is expected to be the main growth driver for the company in the coming years.
Investor Concerns and Market Context
Despite Foxconn's stock being up 17% this year, investors have expressed some concern regarding this trend, citing discussions about a potential AI bubble. This increase is lower than the 57% average rise seen across Taiwanese companies as a whole. Other Apple suppliers, like TSMC, are also experiencing growth in the AI sector, with expectations for over 50% capacity growth in advanced packaging technology for AI chips next year.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
Foxconn's revenue derived from Apple products has decreased to below 29% in the last quarter, a significant drop from over 50% previously. This shift is due to a substantial increase in the company's AI server manufacturing, which now accounts for 51% of its revenue.