Foxconn expects high double-digit growth in AI server rack shipments in Q1, sees shipments doubling in 2026
Taipei, March 17
Taiwan's Foxconn, the world's largest contract electronics maker, has said that its AI server rack shipments are expected to grow at a "high double-digit" pace sequentially in the first quarter of this year, according to a report by Focus Taiwan.
Foxconn Chairman Young Liu said that for 2026 as a whole, AI server rack shipments could double from a year earlier. He added that the company's overall AI portfolio is likely to secure a higher market share than in 2025. Currently, Foxconn holds around a 40 per cent share of the global AI server market.
A key driver of this growth will be the company's AI server production hub in the United States, which is the largest in the country. The facility is expected to roll out 2,000 AI server racks per week in 2026.
Liu's comments came after Foxconn reported a record annual net profit in 2025 of New Taiwan dollars 189.35 billion (USD 5.92 billion), marking a 24 per cent increase compared to the previous year.
The company's consolidated sales also reached a record USD 253.54 billion in 2025, up 18 per cent from 2024. This growth was supported by strong performance in its cloud and networking division as well as its smart consumer electronics division.
In terms of revenue contribution, the cloud and networking division accounted for 40 per cent of Foxconn's total sales in 2025, while the smart consumer electronics division contributed 38 per cent.
The computing division made up 15 per cent, and electronic components, along with other products, contributed 7 per cent. Notably, this was the first time that the cloud and networking division surpassed the smart consumer electronics division in terms of sales share.
Liu noted that despite global economic uncertainties driven by tariffs, geopolitical tensions and currency fluctuations, demand for AI servers has remained strong. This is largely due to continued capital expenditure expansion by major cloud service providers.
Looking ahead, Foxconn said that both the cloud and networking division and the smart consumer electronics division are expected to post strong year-on-year sales growth in the first quarter. However, the computing division may witness a decline in sales compared with the first quarter of 2025.
Meanwhile, Foxconn's board has approved a cash dividend of USD 0.23 per share for its 2025 earnings, the highest payout since the company's listing in 1991. Based on earnings per share of USD 0.43, the payout ratio stands at 52.9 per cent.
— ANI
Reader Comments
Interesting to see the cloud division overtaking consumer electronics. It really marks a shift in their business model. I wonder how much of this AI server demand is being driven by Indian tech companies and startups scaling up their operations.
While the numbers are stellar, I have a respectful criticism. The article mentions geopolitical tensions as a risk. With such a heavy reliance on a US production hub, any trade policy shift could impact this projected growth significantly. Diversification might be key.
2000 racks per week from one US facility is mind-boggling. The energy and cooling requirements for these AI data centers must be enormous. Hope the environmental impact is being managed alongside this tech boom.
As someone in the IT hardware space, this is a clear signal. The future is in cloud and AI infrastructure. Indian companies need to step up their game in component manufacturing and maybe partner with giants like Foxconn. A lot of opportunity here.
The computing division seeing a potential decline is a bit worrying. It shows not all segments are riding the AI wave. Overall, fantastic results though. Hope this growth translates into more tech jobs and innovation worldwide, including in India.
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