Dateline: TAIPEI, May 14, 2025 – Foxconn, the world’s largest electronics manufacturer, downgraded its full-year growth outlook as U.S. trade policy uncertainties loom, leading to an 11.4% decline in shares this year.
- Foxconn cuts growth forecast due to tariff uncertainties
- Q1 profit surged 91% but outlook now cautious
- AI server demand remains robust, offsetting some risks
Market reaction & context
Foxconn (2317.TW) has faced significant challenges this year amid heightened concerns about U.S.-China trade relations. Its shares have fallen 11.4% year-to-date, compared to a decline of 5.4% in the broader Taiwan index. The company has been a pivotal player in the manufacturing space for giants like Apple and Nvidia, particularly as demand for AI infrastructure surges.
Detailed analysis
During an earnings call, Foxconn Chairman Young Liu indicated that rapid changes in U.S. tariff policies have thrown the global supply chain into disarray. Liu noted that the appreciation of the Taiwan dollar could complicate revenue conversions, prompting a more cautious outlook for the remainder of the year.
Despite the outlook adjustment, Foxconn reported a strong first quarter with net profit soaring 91% to T$42.12 billion ($1.39 billion), a figure that surpassed analyst expectations. Revenue also jumped 24.2% year-over-year, driven by robust demand for AI server products.
Outlook / management quote
“Over the past month, rapid changes in U.S. tariff policies have considerably impacted the global supply chain,” Liu said. “With recent exchange rate fluctuations adding to the uncertainty, we are taking a more cautious outlook for the near future.”
While the company enjoys strong demand for AI servers, it will continue to navigate uncertainties tied to trade and tariffs, particularly as it expands manufacturing in Mexico to buffer against U.S. tariff implications.
Conclusion
Foxconn’s shift in guidance marks a significant adjustment reflecting the pressures exerted by ongoing U.S.-China trade tensions. The company’s strong performance in the first quarter is overshadowed by these uncertainties, underscoring the importance of maintaining flexibility in a rapidly evolving market landscape.
No investment advice. For informational purposes only.
References
1 Foxconn Makes Products for Nvidia and Apple. Why It’s Cutting Its Guidance. Barron’s. Retrieved May 14, 2025.
2 Foxconn Expected to Post Strong Q1 Profit on AI Server Demand. Reuters. Retrieved May 13, 2025.
3 Apple Supplier Foxconn Cuts Outlook Due to Tariff Uncertainty. The Economic Times. Retrieved May 14, 2025.