On Wednesday, Apple Inc. (AAPL.O) supplier Foxconn (2317. TW) predicted artificial intelligence applications would fuel server demand this year, but 2023 would be flat due to global economic troubles.
Foxconn Chairman Liu Young-way told the company’s annual shareholders meeting that monetary policy tightening, geopolitical uncertainties, and inflation uncertainty made this year cautious. Still, servers were a bright light owing to AI interest.
“ChatGPT usage is rising,” he remarked. “AI server sales will grow quicker than projected. We anticipate a three-digit increase in the second half of this year.”
Liu said the Taiwanese company wants to enhance its 40% server market share.
Foxconn’s cloud and network goods sector, which includes servers, generated 22% of revenue in the first quarter, second only to smartphones at 56%.
Foxconn reported a 56% drop in first-quarter net profit this month, its greatest quarterly drop in three years, and stated visibility for the entire year was “limited.”
The world’s largest contract electronics maker aims to emulate its iPhone success with EVs.
Foxconn, formerly Hon Hai Precision Industry Co Ltd, acquired the General Motor Co (GM.N) plant in Lordstown, Ohio, and hired Jun Seki, a former Nissan (7201.T) executive, to manage its EV expansion efforts. Liu added the company might expand its EV battery supply chain beyond Taiwan to the US, Indonesia, and India.
Foxconn, which assembles 70% of iPhones, has been diversifying manufacturing away from China after COVID-19 restrictions shut down its biggest iPhone plant last year. The company is also trying to avoid a trade war between Beijing and Washington.
Foxconn’s Zhengzhou iPhone manufacturing and China were still crucial, Liu said.
“The culture there is extremely similar, our rules and regulations are different, but talent is no problem. It’s easy to start new projects there. We’ll develop there.
