The Nvidia supplier posted a sharp Q1 profit rise, yet looming U.S. tariffs may complicate the road ahead.
In what might be described as a textbook case of “good news, bad timing,” Foxconn has reported a stunning 91% surge in first-quarter profits. The world’s biggest electronics manufacturer—and a key supplier to Nvidia—benefited from surging demand for AI servers. But even as the numbers dazzle, executives are looking warily toward Washington.
Net profit for the January–March quarter came in at T$42.12 billion (roughly $1.39 billion USD), handily beating expectations. Analysts had projected a more modest T$37.8 billion, according to Reuters.
AI, it turns out, is good for business.
Apparently, the AI server segment was the standout performer this quarter. This echoes broader industry trends as generative AI continues to drive demand for advanced chips and hardware.
Making Moves to Offset the Tariff Pressure
To soften the impact, Foxconn is pivoting parts of its production strategy. The company is expanding its manufacturing footprint in Mexico and the United States, betting on North American capacity to mitigate future shocks. One such move includes a $20 million investment into a new AI server facility in Houston, Texas, through subsidiary Ingrasys Technology USA.
This facility, as per U.S. business reports, will focus on producing AI accelerators and Nvidia-compatible server equipment, a smart hedge as AI workloads continue to rise across cloud and enterprise environments.
Electric Vehicles on the Radar
Foxconn isn’t stopping at servers. It’s also inching deeper into the electric vehicle (EV) market. The company signed a memorandum of understanding with Mitsubishi Motors to produce an EV model via its EV division Foxtron Vehicle Technologies, and is currently in talks with Nissan for potential EV collaborations.
Analysts see this diversification as strategic. The boom of AI in manufacturing is strong, but unpredictable. EVs offer another growth pillar—and with Foxconn’s vast supply chain capabilities, it’s a natural extension.
Stock Slips Despite Strong Quarter
Despite the strong quarter, Foxconn isn’t handing out champagne just yet. While executives reiterated their full-year growth forecast, they stopped short of offering specific numbers for the upcoming quarter, citing market unpredictability and geopolitical risks.
The market, meanwhile, hasn’t exactly been in a celebratory mood. The company’s stock is down 14% year-to-date, trailing Taiwan’s broader market, which has dropped 7% in the same period.
Some of that dip may be tied to investor anxiety around U.S.-China trade relations, and whether companies like Foxconn, deeply integrated into both economies, can navigate the uncertainty unscathed.
Still, if Q1 is any indication, Foxconn has the muscle—and the mindset—to adapt. AI is helping the company soar, but staying airborne may depend on how it weathers the political turbulence ahead.
