Taiwan’s Foxconn, the world’s largest contract electronics maker and Apple’s top iPhone assembler, reported on Thursday a 19% rise in first-quarter profit from a year earlier, beating expectations thanks to strong global demand for AI products.
The company’s net profit for January-March came in at T$49.92 billion ($1.58 billion), above a consensus estimate of T$48.88 billion. Foxconn is also Nvidia’s biggest server maker.
In an earnings release, it stuck to its previous forecast of “strong” growth for revenue this year and said it also saw strong demand for AI servers.
“AI remains the most important growth driver this year,” rotating CEO Michael Chiang said on an earnings call. He added that major cloud service providers have recently raised capital expenditure plans for this year. “AI is not a short-term theme, but a structural transformation of the industry.”
Foxconn said it expects AI server rack shipments to more than double for the full year…
Most of the iPhones Foxconn makes for Apple are assembled in China, but it now produces the bulk of those sold in the United States in India. The company is also building factories in Mexico and Texas to make AI servers for Nvidia.
MacDailyNews Take: Of course, Foxconn also serves as Apple’s key manufacturing partner for Apple’s custom AI servers specifically for Apple Intelligence’s cloud-based features via Private Cloud Compute (PCC).
Key Details on PCC
• Purpose and Privacy Focus: PCC handles more complex Apple Intelligence tasks (e.g., those needing larger foundation models) that go beyond on-device processing. It uses custom Apple silicon servers (initially based on M-series chips like modified M2 Ultras, now moving toward M5 and dedicated AI server chips) in Apple’s data centers. The design ensures:
• User data is never stored — it’s processed ephemerally (stateless) and deleted after the request.
• Even Apple cannot access the data.
• Servers include hardware-level security (Secure Enclave, Secure Boot, tamper switches) and a hardened OS derived from iOS/macOS for verifiable transparency and a minimal attack surface.
• Deployment: Apple has been shipping U.S.-made advanced servers from a new Houston factory since late 2025 (part of its large U.S. manufacturing/investment push). These are installed in Apple’s existing data centers. Production is ramping up, with plans for more advanced custom AI server chips entering mass production in late 2026 and new data centers coming online in 2027.
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