Kathmandu— Taiwanese tech manufacturer Foxconn, the world’s largest contract electronics maker and key supplier to companies like Apple and Nvidia, reported a 35 percent increase in net profit for the April-June period, reaching $1.86 billion New Taiwan dollars. The surge is attributed to booming demand for AI servers used in data centers as governments and tech giants invest heavily in artificial intelligence infrastructure. The company reaffirmed its forecast of strong revenue growth for the year, despite shares underperforming broader market gains.

Strong Second-Quarter Earnings

Foxconn’s net income rose to $59.97 billion New Taiwan dollars ($1.86bn) in the second quarter, exceeding analyst estimates of $58.38 billion as surveyed by Bloomberg. The company highlighted that growth was primarily driven by demand for AI infrastructure. Foxconn reported a 40 percent year-on-year jump in second-quarter revenue in July.

AI Infrastructure Fuels Growth

Governments and tech companies are making substantial investments in data centers to support the training and operation of AI tools, including chatbots and image generators. This investment has directly benefited Foxconn, which manufactures the servers essential for these data centers. As Nvidia’s biggest server maker and Apple’s top iPhone assembler, Foxconn is strategically positioned to capitalize on this trend.

Expanding Global Production

While much of Foxconn's iPhone assembly currently takes place in China, the company has been diversifying its production locations. A significant portion of iPhones sold in the United States are now assembled in India, and Foxconn is actively building new factories in Mexico and Texas specifically to manufacture AI servers for Nvidia.

Foxconn shares closed 2.7 percent higher on Wednesday following the release of these positive earnings results, though they have risen only 17 percent year-to-date compared to a 57-percent gain in Taiwan’s broader market index.

(With inputs from Al Jazeera)

Originally published on abcnews.com.np.