• Foxconn, the world's largest contract electronics maker, posted its highest-ever Q3 revenue, driven by AI demand.
• The company's revenue growth was primarily due to strong demand for AI servers and robust growth in its cloud and networking products division.
• Despite a steady demand for smart consumer electronics, Foxconn's future outlook anticipates momentum gain as it enters the peak season.
• Foxconn's record-breaking Q3 revenue serves as an indicator of the growing influence of AI technology in the global electronics market.

Foxconn, the world's largest contract electronics maker, has outdone itself by posting its highest-ever revenue for the third quarter. The Taiwan-based company, which is the biggest iPhone assembler for Apple, reported a 20.2% year-on-year increase in revenue, reaching T$1.85 trillion ($57.3 billion). This impressive performance exceeded the company's original expectations of significant growth, as stated in their recent announcement.

The third quarter is a crucial period for Taiwan's tech companies, as they race to supply smartphones, tablets, and other electronics to major vendors like Apple for the Western markets' year-end holiday period. This year, Foxconn's revenue growth was primarily driven by a strong demand for artificial intelligence (AI) servers, leading to robust revenue growth for its cloud and networking products division.

Among Foxconn's customers is AI chip firm Nvidia. In the smart consumer electronics segment, which includes iPhones, Foxconn reported strong quarter-on-quarter growth, thanks to new product launches. However, its year-on-year performance was flat, indicating a steady demand for these products.

Foxconn's Future Outlook and Market Performance

Looking ahead, Foxconn anticipates its operation to gradually gain momentum as it enters the peak season in the second half of the year. The company expects the fourth quarter to be roughly in line with current market expectations, without providing further details. This forecast comes despite the company not providing numerical forecasts.

Foxconn's shares have jumped 86% so far this year, significantly outperforming a 24% rise for the broader Taiwan market. They closed up 3.7% on Friday ahead of the revenue data release, bucking a 0.4% fall on the benchmark index. The company is set to report its full third-quarter earnings on Nov. 14 and has scheduled its annual Tech Day on Oct. 8-9, an event where Foxconn typically announces new products or partnerships.

Historical Performance and Broader Industry Trends

Historically, Foxconn has been a significant player in the global electronics manufacturing industry. Its success in the third quarter of 2024 mirrors its performance in previous years, where it has consistently posted strong financial results. For instance, in the second quarter of 2024, Foxconn's revenue beat market forecasts due to strong AI server demand. This trend of beating estimates with record revenues on AI demand has been a consistent theme in Foxconn's financial performance.

In the broader context, the global smartphone industry has seen significant changes and trends. In 2014, Africa and the Middle East witnessed the fastest levels of growth, with Central & Latin America and Asia Pacific territories following suit. North America showed signs of saturation, with only a 6% increase in shipments in the last 12 months. Western markets were still infatuated with older, more familiar brand names, while Asia was keen to experiment with its new home-grown smartphone talent.