Apple's largest supplier Foxconn expects high double-digit growth in AI server rack shipments in Q1

Strong Growth Expected in AI Server Shipments: Taiwanese contract electronics manufacturer Foxconn said in a report cited by Focus Taiwan that shipments of its AI server racks are expected to grow sequentially at a "high double-digit" pace in the first quarter of this year.

Ambitious Outlook for 2026

Foxconn Chairman Young Liu said that for the full year of 2026, shipments of AI server racks could double compared to the previous year. He further said that the company's overall AI portfolio is likely to gain more market share than it did by 2025. Currently, Foxconn holds about 40 per cent of the global AI server market.

Expansion of US Production Hub

A major factor behind this growth is Foxconn’s AI server manufacturing hub in the US, which is the largest of its kind in the country. The facility is expected to turn out around 2,000 AI server racks each week in 2026.

Record Profit Performance in 2025

Liu's comments came after Foxconn reported a record annual net profit of New Taiwan dollars 189.35 billion (US$5.92 billion) in 2025, representing a 24 per cent increase from the previous year.

Revenue Growth Driven by Key Divisions

The company's consolidated sales also reached a record US$253.54 billion in 2025, up 18 per cent from 2024. This growth was supported by strong performance from its cloud and networking division, as well as its smart consumer electronics division.

Revenue Contribution Breakdown

In terms of revenue contribution, the cloud and networking division accounted for 40 per cent of Foxconn's total sales in 2025, while the smart consumer electronics division contributed 38 per cent.

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Resilience Amid Global Uncertainty

Despite global economic uncertainties due to tariffs, geopolitical tensions, and currency fluctuations, demand for AI servers remains strong, primarily due to continued expansion in capital expenditures by major cloud service providers, Liu said.

Near-Term Business Outlook

Looking ahead, Foxconn said both its cloud and networking division and its smart consumer electronics division are expected to report strong year-over-year sales growth in the first quarter. However, the computing division's sales may decline compared to the first quarter of 2025.

Dividend Announcement

Meanwhile, Foxconn’s board has approved a cash dividend of US$0.23 per share for 2025, marking the company’s highest payout since it went public in 1991. Based on earnings of US$0.43 per share, the payout ratio is 52.9 per cent.

With ANI Inputs

FAQs related to the article

Q1 Why is Foxconn seeing strong demand for AI servers?

Demand is being fueled by big cloud companies continuing to spend heavily on AI infrastructure. As more businesses adopt AI, the need for high-performance servers is rising quickly.

Q2 How big is Foxconn’s presence in the AI server market?

Foxconn is already a major player, with about a 40% share of the global AI server market, putting it among the industry leaders.

Q3 What is Foxconn expecting in 2026?

The company expects AI server shipments to grow sharply, potentially doubling over the year, supported by expansion in production and steady demand from customers.