In a notable shift from its previous stance, Foxconn, a major supplier to tech giant Apple, has unveiled an optimistic outlook for the year 2024. The company, renowned as the world’s largest contract electronics manufacturer, anticipates a substantial revenue surge propelled by the skyrocketing demand for artificial intelligence (AI) servers.
This newfound positivity follows an impressive 33% increase in net profit during the fourth quarter, surpassing earlier forecasts. The upbeat sentiment presented stands in stark contrast to Chairman Young Liu’s cautious remarks in November, where he expressed comparatively reserved expectations for the year ahead.
Liu highlighted the remarkable demand for AI servers among their clientele during an online earnings conference, projecting a remarkable revenue growth of over 40% for this year. Notably, he underscored the burgeoning AI server market, predicting an annual growth rate of 30% from 2023 to 2025, with Foxconn’s growth poised to match or exceed this trajectory.
Foxconn’s robust performance in the last quarter was buoyed not only by the surge in demand for AI servers but also by better-than-expected sales in cloud and networking products, along with smart consumer electronics.
Despite the optimistic forecast for 2024, Foxconn remains cautious about its first-quarter revenue, expecting it to dip compared to the same period last year, when sales surged following the easing of pandemic restrictions in China.
Chief Financial Officer David Huang also shed light on the company’s plans for capital expenditure in 2024, stating that it would at least match the previous year’s growth rate. This increase is attributed in part to Foxconn’s strategic diversification of investments globally, including expansion into areas such as electric vehicles and semiconductors.
In 2023, Foxconn’s capital expenditure witnessed a notable 14% climb, reaching around T$111.7 billion ($3.6 billion).
As the tech landscape continues to evolve rapidly, Foxconn’s bold outlook for 2024 underscores its commitment to innovation and adaptation in the face of dynamic market demands.
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