Foxconn beats estimates with record third-quarter revenue on AI demand

Taiwan’s Foxconn, the world’s largest contract electronics maker, beat expectations to post its highest-ever revenue for the third quarter on strong demand for artificial intelligence servers.

Revenue for Apple’s  biggest iPhone assembler jumped 20.2% year on year to 1.85 trillion Taiwanese dollars ($57.3 billion).

“The result exceeded the company’s original expectations of significant growth,” Foxconn said in a statement on Saturday.

It was also ahead of a T$1.79 trillion LSEG SmartEstimate, which gives greater weight to forecasts from analysts who are more consistently accurate.

Strong AI server demand led to robust revenue growth for its cloud and networking products division, said Foxconn whose customers include AI chip firm Nvidia NVDA.O.

For smart consumer electronics, which includes iPhones, there was a strong quarter-on-quarter growth thanks to new product launches, but its year-on-year performance was flat.

The third-quarter is traditionally when Taiwan’s tech companies start racing to supply smartphones, tablets and other electronics to major vendors such as Apple for Western markets’ year-end holiday period.

Total revenue in September alone reached T$733 billion, up 10.9% year on year and the second-highest ever level for the month.

“Entering the peak season in the second half of the year, we anticipate our operation to gradually gain momentum,” Foxconn said of its outlook for the current quarter.

“The fourth quarter is expected to be roughly in line with current market expectations,” it added, without elaborating.

The company does not provide numerical forecasts.

Foxconn’s shares have jumped 86% so far this year, outperforming by far a 24% rise for the broader Taiwan market. They closed up 3.7% on Friday ahead of the revenue data release, bucking a 0.4% fall on the benchmark index.

The company will report its full third-quarter earnings on Nov. 14. It has scheduled its annual Tech Day on Oct. 8-9, an event where Foxconn normally announces new products or partnerships.