Foxconn is the largest contract electronics manufacturer in the world; in Q2 2025, Foxconn achieved a major turning point: the sales revenue of its AI servers has surpassed its Apple product revenue. Starting decades ago with being the main iPhone assembly partner of Apple, Foxconn is slowly becoming a high-profile figure in the burgeoning field of AI infrastructure. This move signifies a strategic transition from the heavy dependence on consumer electronics to the high-margin and high-demand AI hardware. Foxconn is poised to implement diversification in various business segments as a rather ambitious strategy to ensure its market share in the upcoming complex global technological environment. Since the AI server market is estimated to grow in the next ten years at an alarming rate.
Foxconn’s Revenue Shift and AI Market Surge
Foxconn’s Q2 2025 earnings revealed a 15.82% year-on-year revenue jump to T$1.797 trillion (approximately USD 59.73 billion), with AI server sales emerging as the company’s largest revenue stream. Historically dependent on iPhone production from its massive Zhengzhou facility, often called “iPhone City,” Foxconn’s transition underscores the growing dominance of AI infrastructure. According to CNBC, analysts forecast that its AI server business will grow over 170% year-over-year this quarter, reflecting surging global demand.
Foxconn now holds a 40% share of the global AI server production market, bolstered by exclusive contracts for advanced chips such as NVIDIA’s Blackwell series, which command premium pricing. This move positions Foxconn to capture value not just in assembly but across the AI hardware supply chain. Although the Zhengzhou base continues to grow as a central iPhone attractor, it is shifting to AI server production to supply the North American market, which analysts estimate will generate USD 32.3 billion in 2024. Expanding to AI servers means that Foxconn would be less dependent on Apple, which has been experiencing sluggish demand and transport logistics deficits in parts. The strategic vision of Foxconn aligns with one of the most booming sectors of technology, as explained by this revenue leveling.
Strategic Investments and Potential Risks
Foxconn’s pivot toward AI extends beyond revenue metrics. The company is investing heavily in “lights-off” factories, fully automated facilities in Shenzhen, Taiwan, and Mexico, using AI-powered robotics to enhance efficiency and scalability. Several of these have earned World Economic Forum lighthouse factory certification, cementing Foxconn’s reputation for cutting-edge manufacturing. These advancements align with forecasts from GMI Insights, which project the AI server market to reach $1.56 trillion by 2034 at a CAGR of 28.2%.
However, Foxconn’s transformation carries notable risks. Geopolitical tensions between the U.S. and China threaten its supply chains. Reuters reports that proposed U.S. tariffs, 10% on all imports and 60% on Chinese goods, could directly impact operations at Zhengzhou, a key AI server and iPhone production site. Currency fluctuations and the absence of detailed AI revenue forecasts in Foxconn’s quarterly reports further suggest management caution.
AI Leadership Amid Shifting Global Dynamics
The milestone of Foxconn, whereby the AI servers surpass Apple products, becomes a bigger success than merely a financial one; up until Q2 of 2025, the company is transforming its corporate identity. With the manufacturing supremacy, international networks, and automation proficiency, Foxconn is taking a strategy to drive itself to the top of the AI infrastructure. However, it will only succeed by avoiding geopolitical risks, competitive forces, and market changes. In the case of Foxconn, should it manage to maintain its growth and curtail these risks, the company would not only be a supplier to the AI revolution but also one of the driving forces of it, transforming the dominance of power in the global manufacturing of technology throughout the next decade.
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