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- Foxconn’s AI server sales, boosted by Nvidia, surpassed iPhone revenue in Q2 2025 for the first time.
- Cloud and networking products made up 41% of Foxconn’s sales, while consumer electronics dropped to 35%.
- New factories in Houston and Mexico aim to support Nvidia demand and diversify Foxconn’s supply chain.
- Taiwan now controls 90% of AI server shipments, with Foxconn holding nearly 40% market share.
In a major milestone for Taiwan’s largest contract manufacturer, Foxconn’s partnership with Nvidia has catapulted its AI server business ahead of smartphones for the first time in its history.
Once synonymous with Apple’s iPhones, the company is now rebranding itself as a global leader in AI infrastructure, a move that underscores a dramatic shift in global technology demand.
AI Servers Surpass iPhone Revenue
Foxconn, officially known as Hon Hai Precision Industry, reported that in Q2 2025, revenue from cloud and networking products , including AI servers built for Nvidia, accounted for 41% of its total sales, overtaking consumer electronics, which dropped to just 35%.
Only four years ago, smartphones and other personal devices dominated more than half of Foxconn’s revenue.
This pivot highlights the slowing global smartphone market and the booming demand for high-performance computing infrastructure. With AI adoption accelerating worldwide, Foxconn’s early gamble on servers is paying off in record-breaking revenue growth.
Nvidia Partnership Fuels Explosive Growth
Central to Foxconn’s success is its deepening alliance with Nvidia, the world’s most valuable chipmaker. Foxconn now produces a significant share of Nvidia’s AI servers, positioning itself as a critical player in powering data centers that fuel generative AI applications, cloud computing, and machine learning workloads.
To meet growing demand, the company is building new factories in Houston, Texas, and Mexico, ensuring proximity to key U.S. markets. Analysts expect these facilities to strengthen Foxconn’s role in Nvidia’s global supply chain while reducing risks tied to overdependence on Asia-based production.
Foxconn has projected a 170% year-on-year increase in AI server revenue for Q3 2025, reflecting how quickly the market is expanding. This surge has already translated into a 27% profit jump in Q2, with net income reaching NT$44.36 billion ($1.5 billion).
From Apple’s Assembler to AI Titan
Foxconn’s pivot is not just opportunistic, it reflects a strategic transformation years in the making. Chairman Young Liu, who took over in 2019, began steering the company toward emerging sectors like electric vehicles, semiconductors, and AI servers well before the recent boom.
The foresight proved critical. By building design, manufacturing, and supply chain capabilities in servers years before AI took off, Foxconn secured partnerships and expertise that rivals are only now trying to establish. Today, it commands nearly 40% of the global market for general-purpose and AI servers, cementing its dominance far beyond smartphones.
This shift also represents a historic reinvention for a company founded in 1974 as a small electrical component maker. From producing connectors and later assembling iPhones, Foxconn has evolved into an AI-first manufacturing powerhouse, redefining what it means to be a global electronics leader.
Taiwan’s Broader Tech Pivot
Foxconn’s success reflects a larger transformation across Taiwan’s technology sector. The island, which already accounts for 80% of global server shipments and more than 90% of AI servers, is leveraging decades of expertise in manufacturing for U.S. tech giants to dominate the AI wave.
Other Taiwanese firms are also experiencing record growth. Wistron’s revenue between January and July 2025 surged nearly 93%, while Quanta Computer grew over 65% in the same period.
Together, these companies are reshaping Taiwan’s role in the global supply chain, shifting focus from smartphones and PCs to next-generation AI infrastructure.
