Foxconn Warns of Weaker 2025 Outlook Despite Strong AI Demand

Hon Hai Precision Industry Co Ltd (TW:2317), globally known as Foxconn, reported solid quarterly earnings but issued a cautious sales outlook for 2025, citing currency pressures and trade policy uncertainty. Despite its financial strength, Foxconn shares dropped 2.2% in Thursday trading, weighing down the Taiwan Weighted Index.

Chairman Young Liu said during an earnings call that the company still expects revenue growth in 2025, though at a slower pace than previously anticipated. A key factor behind the revision is the recent appreciation of the Taiwan dollar, which has strengthened sharply against the U.S. dollar. Market volatility tied to U.S. trade policy and economic outlook has driven a retreat from dollar positions, boosting the Taiwanese currency and pressuring export-reliant firms like Foxconn.

Liu also expressed concern over ongoing U.S.-China trade tensions. Although both countries recently agreed to deescalate tariffs, high duties remain in place, creating persistent headwinds for global tech manufacturers.

Despite the cautious forecast, Foxconn’s earnings were lifted by strong demand for artificial intelligence servers. The company is building a major manufacturing plant in Mexico to produce AI servers for Nvidia (NASDAQ:NVDA), aiming to diversify away from China amid trade uncertainty. Currently, these servers are manufactured and shipped from China, making the Mexico facility a strategic shift.

Foxconn also remains Apple’s (NASDAQ:AAPL) largest iPhone assembler, with most production based in China. This makes the firm particularly vulnerable to geopolitical risks between Washington and Beijing.

As AI-driven demand continues to support its core business, Foxconn’s forward guidance reflects broader macroeconomic and policy risks, including currency fluctuations and trade barriers, that could temper its growth trajectory in the coming year.