Taiwan based Apple supplier, Foxconn, has revised its outlook for the year ahead and anticipates a substantial increase in revenue. The company is confident that its growth will be driven by the surging demand for artificial intelligence (AI) servers. This optimistic stance follows a fourth-quarter net profit that exceeded expectations with a remarkable 33% jump.
Foxconn Chairman, Young Liu, expressed his confidence in the strong demand for AI servers from their clients, stating that he expects the business to achieve revenue growth of over 40% this year. Additionally, he emphasized that the AI server market is predicted to experience 30% annual growth between 2023 and 2025, and Foxconn’s growth in this sector could even surpass these estimates.
The Taiwanese company’s net profit for the October-December period reached T$53.1 billion ($1.7 billion), surpassing the T$43.5 billion LSEG SmartEstimate. This 33% surge in profit represents the highest year-on-year growth recorded in a quarter since March 2021. In addition to the strong demand for AI servers, Foxconn also witnessed better-than-expected sales in cloud and networking products, as well as smart consumer electronics.
Foxconn’s revenue in the fourth quarter was primarily driven by consumer electronics, including smartphones, accounting for 58% of total revenue. Cloud and networking products, which include servers, contributed 20% to their revenue stream.
While Foxconn expects healthy growth in 2024, the company acknowledges that its first-quarter revenue will be lower than the same period last year. This is due to a surge in sales witnessed after the easing of pandemic restrictions in China. Chief Financial Officer David Huang also highlighted that the capital expenditure growth in 2024 would at least match the previous year’s rate. This is attributed to the company’s efforts to diversify its investments globally and expand into new sectors, such as electric vehicles and semiconductors. In 2023, Foxconn’s capital expenditure increased by 14% to approximately T$111.7 billion ($3.6 billion).
FAQ:
Q: What is driving Foxconn’s anticipated revenue growth?
A: Foxconn attributes its expected revenue growth to the booming demand for artificial intelligence servers.
Q: What was Foxconn’s fourth-quarter net profit and how does it compare to estimates?
A: Foxconn’s net profit for the October-December period was T$53.1 billion ($1.7 billion), exceeding the estimated T$43.5 billion.
Q: How does Foxconn plan to diversify its investments?
A: Foxconn aims to diversify its investments by expanding into areas such as electric vehicles and semiconductors, in addition to its existing portfolio.
Sources: Reuters (www.reuters.com)
FAQ:
Q: What is driving Foxconn’s anticipated revenue growth?
A: Foxconn attributes its expected revenue growth to the booming demand for artificial intelligence servers.
Q: What was Foxconn’s fourth-quarter net profit and how does it compare to estimates?
A: Foxconn’s net profit for the October-December period was T$53.1 billion ($1.7 billion), exceeding the estimated T$43.5 billion.
Q: How does Foxconn plan to diversify its investments?
A: Foxconn aims to diversify its investments by expanding into areas such as electric vehicles and semiconductors, in addition to its existing portfolio.
Definitions:
– Foxconn: A Taiwan-based company that is a major supplier for Apple. It is involved in the manufacturing of various electronic devices and components.
– Artificial Intelligence (AI) Servers: Servers that are specifically designed to handle tasks related to artificial intelligence, such as machine learning and data analysis. These servers are equipped with specialized hardware and software to efficiently process AI workloads.
– Revenue: The total income generated by a company from its business activities.
– Net Profit: The amount of money that remains after deducting expenses from the total revenue. It is a measure of the company’s profitability.
– LSEG SmartEstimate: An estimated value of a company’s financial performance provided by LSEG, the London Stock Exchange Group.
– Capital Expenditure: The amount of money a company invests in acquiring, upgrading, or maintaining its physical assets, such as equipment, buildings, and technology.
– Electric Vehicles: Vehicles that are powered by electricity instead of traditional fossil fuels. They use electric motors and batteries for propulsion.
– Semiconductors: Electronic components made from semiconductor materials, such as silicon. These components are essential for the functioning of various electronic devices, including computer chips and integrated circuits.
Suggested Related Links:
– Reuters: A reputable news organization that covers a wide range of topics, including business, finance, and technology.
The source of the article is from the blog toumai.es