Taiwan’s Foxconn, which rose to become a global tech manufacturing juggernaut by assembling millions of iPhones, can now say its main business is no longer Apple as it takes advantage of the artificial intelligence boom to diversify its income.
Its revenue from making AI servers and other cloud and networking products, including for major customer Nvidia, surpassed smart consumer products such as iPhones for the first time in the second quarter, marking the culmination of a shift that began years ago and has swept through Taiwan’s tech industry.
Foxconn’s heavy reliance on the smartphone business had long been viewed by investors as a significant risk, as demand growth for new iPhones had gradually weakened since they were first introduced nearly two decades ago, leaving the top iPhone assembler grappling with slowing sales momentum, analysts said.
While its expansion into EVs and chips has yet to show a meaningful contribution to its top-line, Foxconn’s success in AI server manufacturing – the company is Nvidia’s biggest server maker – is the result of its early bets before the technology was thrust into the limelight with the advent of ChatGPT in late 2022.
