Taiwan’s Foxconn, once best known as the world’s largest iPhone assembler, has officially crossed a major milestone in its decades-long evolution.
The company’s revenue from manufacturing AI servers and other cloud networking products has now surpassed its earnings from consumer electronics like smartphones for the first time, marking a historic turning point not only for Foxconn but also for Taiwan’s wider tech industry.
The shift underscores how Foxconn has reduced its dependence on Apple, long its biggest client, and successfully capitalized on the artificial intelligence boom. According to company filings, cloud and networking revenues represented 41% of Foxconn’s income in the second quarter, compared with 35% from consumer electronics. In 2021, consumer electronics still made up 54% of its business, demonstrating just how quickly the transition has taken place.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
The Nvidia Factor
Foxconn’s early bets on servers and data center hardware have paid off handsomely, especially as it has become the biggest manufacturer of AI servers for Nvidia, whose chips power the world’s most advanced AI systems. Foxconn first worked with Nvidia more than two decades ago on graphics card reference designs, later expanding into general-purpose servers in 2009. That foundation gave it a head start when AI demand surged after the release of ChatGPT in 2022.
Industry analysts note that Foxconn now commands nearly 40% of the global AI server market and has nurtured a long-term partnership with Nvidia by committing investments earlier than competitors. The company has already announced plans to build new AI server factories in Houston, Texas—part of Nvidia’s $500 billion U.S. investment strategy—and in Mexico to serve North American demand.
As a result, Foxconn expects its AI server revenue to surge more than 170% year-on-year in the third quarter, a pace unmatched by its smartphone business. Both Foxconn and Nvidia have declined to comment on the specifics of their partnership, while Apple has remained silent as its once-dominant role in Foxconn’s revenue mix diminishes.
The Broader Industry Shift
Foxconn’s pivot reflects a wider transformation across Taiwan’s technology sector. Firms such as Quanta Computer and Wistron, once reliant on notebook and consumer electronics assembly, have also ramped up AI server production to meet surging demand from U.S. tech giants. Data show that Wistron’s revenue jumped nearly 93% between January and July, while Quanta’s rose more than 65% over the same period.
Taiwanese manufacturers now account for roughly 80% of all global server shipments and more than 90% of AI servers, underscoring the island’s strategic importance to the digital infrastructure underpinning the AI economy. Analysts at BofA Global Research say this transition demonstrates the agility of Taiwan’s supply chain and its ability to adapt quickly to the needs of global tech leaders.
Strategic Vision Beyond iPhones
Foxconn Chairman Young Liu, who took over in 2019, has been the architect of this diversification strategy. While the company’s ventures into electric vehicles and semiconductors are still developing, the pivot into AI servers shows the results of his long-term vision to lessen Foxconn’s vulnerability to slowing smartphone sales.
“Foxconn has shown a willingness to commit capital earlier than others, both in the Apple era and now with Nvidia,” said Ming-Chi Kuo, an analyst at TF International Securities. “Its ability to meet demanding quality standards while diversifying production sites and vertically integrating operations has positioned it as an indispensable partner in the AI era.”
The shift signals more than just a change in revenue streams for Foxconn—it marks the company’s redefinition from a consumer electronics assembler into one of the world’s most important players in artificial intelligence infrastructure.