Reuters
If you wanted a signal that we’ve truly entered the AI era and left mobile behind, this is it: iPhones are no longer Foxconn‘s most important business.
For investors and industry watchers, this is a pivotal moment. The company best known as Apple‘s factory floor has become an AI-first manufacturer. If Foxconn was once the backbone of the smartphone era, it’s now building the infrastructure of the AI age.
For the first time, Foxconn’s Cloud & Networking Products division has overtaken Smart Consumer Electronics, which runs the iPhone assembly operation. In the second quarter of 2025, Cloud & Networking revenue jumped 47% year-over-year to NT$731.8 billion, eclipsing the NT$634.5 billion generated from Smart Consumer Electronics, according to Barclays research.
More than half of that cloud revenue now comes from AI servers, which grew more than 60% in the second quarter alone. The company expects AI server revenue to soar 170% year-over-year in the third quarter, fueled by growing demand from hyperscale cloud providers.
“The company has grown from its legacy business of building smartphones or assembling computers for the likes of Apple to being a critical player in not only AI servers but also in emerging new product categories such as EVs and humanoid robots,” Barclays analysts Jiong Shao, Lian Xiu Duan, and Xinyao Song, wrote in a note to investors on Monday.
This surge marks a tectonic shift: Apple, long Foxconn’s most important customer, is no longer its primary growth driver. Instead, Foxconn is rapidly positioning itself as an AI infrastructure heavyweight. The firm has increased its market share in AI servers, including specialized ASIC variants, and is working closely with partners such as Nvidia on next-gen server architectures and humanoid robotics integration.
Geographically, Foxconn is hedging against geopolitical and tariff risks by expanding AI server production in the US, including in Texas, Wisconsin, and planned operations in California and Ohio. Mexico remains a primary base, but the growing US footprint reflects strategic repositioning for North American customers, including the big cloud providers.
Beyond AI servers, Foxconn is diversifying into electric vehicles, semiconductors, and healthcare robotics. Yet it’s the server business that has seized the spotlight, now representing 41% of total revenue and expected to grow over 70% for the full fiscal year, according to Barclays research.
Meanwhile, Foxconn expects no growth in its iPhone-heavy consumer electronics business.
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