Foxconn projects high double-digit AI server shipment growth in Q1

Foxconn, the world's largest contract electronics maker, forecasts a "high double-digit" sequential growth in AI server rack shipments for Q1 and expects them to double by 2026, solidifying its 40% global market share.

AI Server Growth Projections

Taiwan's Foxconn, the world's largest contract electronics maker, has said that its AI server rack shipments are expected to grow at a "high double-digit" pace sequentially in the first quarter of this year, according to a report by Focus Taiwan. Foxconn Chairman Young Liu said that for 2026 as a whole, AI server rack shipments could double from a year earlier. He added that the company's overall AI portfolio is likely to secure a higher market share than in 2025.

Currently, Foxconn holds around a 40 per cent share of the global AI server market. A key driver of this growth will be the company's AI server production hub in the United States, which is the largest in the country. The facility is expected to roll out 2,000 AI server racks per week in 2026.

Record 2025 Financial Performance

Liu's comments came after Foxconn reported a record annual net profit in 2025 of New Taiwan dollars 189.35 billion (USD 5.92 billion), marking a 24 per cent increase compared to the previous year. The company's consolidated sales also reached a record USD 253.54 billion in 2025, up 18 per cent from 2024. This growth was supported by strong performance in its cloud and networking division as well as its smart consumer electronics division.

Revenue Breakdown by Division

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. The computing division made up 15 per cent, and electronic components, along with other products, contributed 7 per cent. Notably, this was the first time that the cloud and networking division surpassed the smart consumer electronics division in terms of sales share.

Sustained Demand and Future Outlook

Liu noted that despite global economic uncertainties driven by tariffs, geopolitical tensions and currency fluctuations, demand for AI servers has remained strong. This is largely due to continued capital expenditure expansion by major cloud service providers.

Looking ahead, Foxconn said that both the cloud and networking division and the smart consumer electronics division are expected to post strong year-on-year sales growth in the first quarter. However, the computing division may witness a decline in sales compared with the first quarter of 2025.

Highest Dividend Payout Since 1991

Meanwhile, Foxconn's board has approved a cash dividend of USD 0.23 per share for its 2025 earnings, the highest payout since the company's listing in 1991. Based on earnings per share of USD 0.43, the payout ratio stands at 52.9 per cent. (ANI)

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