Hon Hai Precision Industry (Foxconn) saw a 2% decrease in net profit for the fourth quarter of 2025, falling short of analyst expectations. Despite strong demand for artificial intelligence servers driven by the global data center boom, the technology conglomerate based in Taiwan experienced a drop in quarterly earnings. The company, formally known as Hon Hai Precision Industry, reported on Monday that net profit declined by 2% to NT$452.1 billion (approximately US$14.1 billion), missing the analyst consensus of NT$608.8 billion compiled by FactSet. Revenue, however, increased by 22% year-over-year to NT$26.06 trillion. Although double-digit revenue growth was achieved, a significant rise in tax expenses weighed on fourth-quarter profitability. The company's gross margin also fell to 5.88%, down from 6.15% in the same period last year. Foxconn, once best known for assembling Apple's iPhone, is the world's largest electronics contract manufacturer. Today, a substantial portion of its revenue comes from producing AI servers for companies such as NVIDIA and Amazon, positioning it as a key player in the AI boom—a sector where tech giants are investing hundreds of billions of dollars in chips, servers, and data centers. In the latest quarter, revenue from cloud and networking products, which includes AI servers, accounted for 42% of the company's total revenue. This figure remained unchanged from the third quarter but was higher than the 41% recorded in the second quarter. This segment has now surpassed consumer electronics as Foxconn's largest source of income.
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