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Foxconn Technology Group anticipates significant revenue growth in its AI and electric vehicle (EV) sectors by 2028, driven by rising demand for AI applications and strategic partnerships, including one with Mitsubishi Motors. The company employs a modular manufacturing approach to reduce costs and development time, aiming for substantial market share in the EV industry. Despite geopolitical challenges, Foxconn's diversified operations and contract manufacturing model provide resilience, as evidenced by a 91% profit increase in Q1 2025, largely from its AI server business.
Foxconn is set to announce a partnership with a second Japanese automaker, following a recent agreement with Mitsubishi Motors to supply a new electric vehicle model. This move aligns with Foxconn's strategy to leverage its electronics manufacturing expertise in the growing EV market, aiming to embed its technology in 5% of global electric vehicles by 2025. The collaboration offers mutual benefits, enhancing manufacturing efficiency for Japanese automakers while providing Foxconn with automotive credibility and technical knowledge.
Foxconn has signed an agreement to produce a new electric vehicle for Mitsubishi, with initial manufacturing set to take place in Taiwan. The EV, a revised version of the Model B prototype, is expected to launch in Australia and New Zealand by 2026, aligning with Mitsubishi's goal to electrify its fleet by 2035. This partnership highlights a growing trend of automakers outsourcing production to specialized manufacturers to streamline operations and accelerate the transition to electric vehicles.
Taiwan's President Lai Ching-te met with tech executives on April 5 to address the challenges posed by new US tariffs, which impose a 32% duty on Taiwanese products, excluding semiconductors. The government announced a NT$88 billion (US$2.67 billion) aid package to support affected industries and plans to engage in discussions with the US without retaliatory measures.
Foxconn, the largest contract electronics manufacturer, expects its AI server revenue to surpass iPhone sales within two years, potentially as early as this year. Chairman Young Liu highlighted strong demand for AI servers, projecting revenue could reach T$1 trillion (US$30.29 billion) by 2025, making up over half of total server revenue. Additionally, revenue from cloud and networking products is anticipated to match that of smart consumer electronics like iPhones in the same timeframe.
Tamil Nadu has offered Foxconn approximately 200 acres of land for a proposed battery energy storage system (BESS) unit, which would be the company's second facility globally. The state is also providing an incentive package to attract the world's largest contract manufacturer of electronics, as discussions are nearing completion. This initiative aligns with Foxconn's strategy to diversify beyond smartphone manufacturing, focusing on electric vehicles and battery production.
Foxconn anticipates that new tariffs from U.S. President-elect Donald Trump will have a lesser impact on its operations compared to competitors, thanks to its extensive global manufacturing footprint. Chairman Young Liu noted that while clients might shift production locations, Foxconn's business model as a contract manufacturer positions it favorably against potential tariff challenges.
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