iPhone manufacturer Foxconn’s profits grew 72% year on year in the first quarter of 2024, though this fell short of market expectations.
According to Bloomberg, Foxconn was forecast to bring in 29.1 billion New Taiwan dollars (around US$90 million) compared to the 22 billion New Taiwan dollars (US$680 million) reported..
Foxxconn’s earnings are tightly linked to cornerstone client Apple Inc (NASDAQ:AAPL, ETR:APC), making it highly exposed to the cyclical nature of iPhone demand.
Apple is suffering from a drop in iPhone demand in China due to the reemergence of domestic competitor Huawei. This led to Samsung overtaking Apple as the world’s leading smartphone maker in April.
Foxconn does not provide specific earnings forecasts, but Reuters quoted management as saying electronics demand will likely stay flat in 2024.
Investments in artificial intelligence and data centre infrastructure could help offset this sluggish demand, with a 40% growth in the AI server business tipped for the year ahead.