Hon Hai Precision Industry, also known as Foxconn, reported a 27% increase in quarterly profit to NT$44.36 billion for the June quarter, driven by strong demand for AI servers, with revenue reaching NT$1.79 trillion ($59.73 billion).

While most iPhones are assembled in China, Foxconn has shifted some production to India and is building new factories in Mexico and Texas for AI server manufacturing for Nvidia, amid U.S. tariffs and geopolitical tensions.

Despite the profit surge, Foxconn expects slower overall sales growth in 2025 due to economic challenges and geopolitical risks, and has not provided specific guidance for the third quarter.

The company faces ongoing trade uncertainties, including U.S. tariffs on semiconductors and trade tensions between the U.S. and China, which have led to a downward revision of its full-year revenue guidance.

Foxconn is actively diversifying its manufacturing base to mitigate risks from U.S.-China trade tensions, including forming a strategic partnership with TECO Electric & Machinery to build data centers and taking a stake in the company.

In its expansion into electric vehicles, Foxconn sold a former Ohio EV factory for $375 million but plans to continue using the site for broader product manufacturing, signaling a strategic shift.

The company's AI server sales are expected to grow over 170% year-on-year in the third quarter, making AI servers the primary growth driver amid sluggish demand for consumer electronics.

Foxconn's revenue growth is supported by surging AI-related orders, with a 16% year-on-year increase in sales during the same period, driven by cloud computing giants like Amazon, Microsoft, and Google.

Foxconn is scheduled to hold its earnings call at 3 p.m. Taipei time, where it will update its annual outlook; so far this year, its shares have risen 7.9%, outperforming the Taiwan index.

The appreciation of the Taiwan dollar could reduce revenue by about 3%, adding to the economic challenges the company faces.

Beyond traditional iPhone assembly, Foxconn is diversifying into data centers and AI infrastructure through strategic partnerships, including a stake in TECO Electric & Machinery.

While Foxconn anticipates growth in Q3, it remains cautious due to global political and economic uncertainties, especially as it continues to adapt to shifting manufacturing locations and geopolitical pressures.