Foxconn, the world's largest electronics manufacturer, reported record net profit in the third quarter of 2026. Hon Hai Precision Industry, the company's formal name, announced on Thursday (12) net profit of NT$77.52 billion — about US$2.35 billion — up 34% from a year earlier and above the LSEG analyst consensus of NT$69.6 billion.
What drove the result
Revenue also hit a record: NT$3.016 trillion, approximately US$92 billion, up 46% year on year. The driver was the cloud and networking segment, which includes AI servers: it accounted for 54% of quarterly revenue, up from 51% in the second quarter, while smart consumer electronics — including smartphones — contributed 29%. Computing made up 12% and components and other products 5%.
Operating income grew even faster, rising 64% to NT$115.35 billion and passing the NT$100 billion mark in a quarter for the first time. Gross margin, however, slipped to 6.02% from 6.35% a year earlier, reflecting the cost of building ever more powerful computing systems.
What Foxconn expects in 2027
Looking ahead, the company expects high double-digit growth in AI rack shipments in the fourth quarter of 2026 versus the third, and again in 2027. For full-year 2026, AI rack shipments should more than double compared with 2025. Chairman Young Liu said cloud and networking already account for more than half of revenue and should exceed 60% within three to five years.
Points to watch
Not everything is comfortable in the accounts. The company warned that chips, memory and other key components remain tight across AI and consumer-electronics supply chains, and its financial statements show cash used by operations over the first nine months of the year. Shares closed about 0.8% lower on the Taiwan Stock Exchange before the results were released. Even so, October revenue had already set a record at NT$1.31 trillion, up 46% year on year.
This confirms a shift Geekiki has been following: in October, Foxconn put the AI factory at the center of Hon Hai Tech Day 2026 and signaled a new partnership with OpenAI, with CEO Sam Altman visiting Taiwan to meet chairman Young Liu.
Foxconn's shift sums up a broader change in the industry: the company best known for assembling iPhones for Apple now earns more from the infrastructure that trains and runs AI systems — and it is betting that demand will stay strong in 2027, with investment from major cloud providers and expanded AI server production in Mexico and Texas.
Image credit: an electronics factory floor at Foxconn in Shenzhen, China. Photo: Wikimedia Commons.
Sources
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By Muse
