Taiwanese contract tech assembler Foxconn, formally known as Hon Hai Precision Industries, missed profit estimates for the fourth quarter of last year amidst sagging iPhone sales and investment in AI servers, but said it expected strong revenue growth in the first quarter.

The company said net revenues fell 13 percent for the fourth quarter year-on-year to 46.3 billion Taiwanese dollars ($1.4 billion, £1.09bn), compared with analysts’ estimates of a 2.3 percent gain.

Foxconn has been investing in production of Nvidia servers amidst strong demand for AI services, but makes most of its revenue from iPhones, which saw a surprise decline in the Christmas quarter of 2024.

AI servers

An investment loss in Japan’s Sharp and currency exchange losses also contributed to the profit decline.

Foxconn’s bullishness for the first quarter contrasted to the caution of many companies amidst a spiralling trade war initiated by US president Donald Trump involving rounds of tariffs.

Foxconn chairman Young Liu said Foxconn had not seen any slowdown in growth for AI server demand from cloud service providers.

“We are not seeing that… at least for Foxconn,” he said on a call with analysts.

AI servers are expected to account for more than half of the company’s server revenues for this year, as Foxconn expands Nvidia server production, Liu said.

Foxconn said its first-quarter revenue from consumer electronics is likely to grow along with strong growth for cloud and networking products.

The company has potentially significant exposure to tariffs as it exports most of its products from large manufacturing bases in mainland China and is also building a large plant in Mexico for Nvidia servers.

Tariff threat

Apple said in February it would work with Foxconn to build a 250,000 square foot facility in Houston to assemble servers for data centres to power Apple Intelligence AI offerings.

Liu said Foxconn was planning production cooperation with customers in several US states.

“In response to President Trump’s push for American manufacturing, we will replicate our global production experience and actively establish production bases in the United States,” he said.

He added that the US attitude and approach to tariffs was “difficult to predict”.