(Taipei) Taiwanese electronics giant Foxconn announced on Tuesday a 72% increase in its first quarter net profit despite writedowns, to $679 million, in a context of rapid development of artificial intelligence (AI). .
This is the third consecutive quarter of year-on-year increase in net profit of the world’s largest electronics supplier, whose official name is Hon Hai Precision Industry, after three years of slump linked in particular to the COVID-19 epidemic. .
This result is, however, significantly lower than the expectations of analysts, who were counting on an increase of around 125% in a buoyant market which has seen Foxconn shares rise by more than 60% since the start of the year on the stock market. from Taipei.
The group’s spokesperson, James Wu, acknowledged that it had suffered from depreciation linked to its participation in the Japanese Sharp, of which he is the reference shareholder with more than 30% of the capital after taking control. in 2016.
But “the worst is over for Sharp” for whom things “can only improve in the future,” assured Mr. Wu on Tuesday on the sidelines of the results presentation.
In general, Foxconn approaches the future with “optimism” because “the strong demand for servers dedicated to AI will represent a gigantic new market”, he underlined.
“Hon Hai is virtually the only manufacturer capable of developing each of the key components itself, from modules and core servers to data centers and high-speed network switches,” Wu said.
AI factories
The Taiwanese giant, which assembles devices for several large global companies, including Apple, has undertaken to diversify its activity into AI support technologies, booming since the appearance at the end of 2022 of ChatGPT from the Californian start-up OpenAI .
From a simple “manufacturer”, Foxconn aims to become a “platform provider”, recently summarized its CEO, Young Liu.
In October, the Taiwanese giant announced that it was joining forces with American processor leader Nvidia to create “artificial intelligence factories”, very high capacity centers.
Concerning Sharp, Foxconn wants to relaunch the Japanese group by allowing it to fully benefit from “the new opportunities offered by the technological revolution of AI”, both in mobility technologies and at home or in the office, indicated Mr. Wu.
The Sharp factory in Sakai must also be transformed into a data center, the group said.
In November, Foxconn also announced that it planned to invest an additional $1.54 billion in India for “operational needs”.
Foxconn is present in more than twenty countries, but most of its activities are based in China, where it is the largest private employer with more than a million employees.
The Taiwanese group, however, is seeking to reduce this dependence on this country after seeing its production affected by three years of strict policies linked to COVID-19 as well as tensions with the United States.
Foxconn confirmed in October that it was the subject of investigations in China, and claimed that it was cooperating with Chinese authorities.