For more than a decade, Foxconn was synonymous with the iPhone. As Apple’s primary manufacturing partner, the company earned its reputation as the backbone of the smartphone era. But in 2025, a historic shift has taken place: iPhones are no longer Foxconn’s most important business.
Instead, the Taiwanese manufacturer has emerged as a critical player in the AI revolution, with its Cloud & Networking Products division officially overtaking its Smart Consumer Electronics business the very arm responsible for assembling Apple’s flagship iPhones.
From Smartphones to Servers: The Revenue Shift
According to Barclays research, Foxconn’s Cloud & Networking Products revenue surged 47% year-over-year in the second quarter of 2025, reaching NT$731.8 billion. That figure eclipsed the NT$634.5 billion generated from its Smart Consumer Electronics division, marking the first time iPhones have been dethroned as Foxconn’s biggest business driver.
The transformation is fueled almost entirely by AI servers. More than half of Foxconn’s cloud revenue now comes from this segment, which grew over 60% in Q2 alone. The company expects AI server revenue to skyrocket by 170% year-over-year in Q3, reflecting explosive demand from hyperscale cloud providers racing to expand their AI infrastructure.
Why AI Servers Are Foxconn’s New Growth Engine
Foxconn has quietly evolved from being Apple’s assembly powerhouse to becoming a linchpin in the AI infrastructure supply chain.
Barclays analysts Jiong Shao, Lian Xiu Duan, and Xinyao Song note that Foxconn has “grown from its legacy business of building smartphones or assembling computers for the likes of Apple to being a critical player in AI servers and new categories such as EVs and humanoid robots.”
The company’s server business now accounts for 41% of total revenue and is projected to expand by more than 70% for the full fiscal year. By contrast, Foxconn expects no growth from its iPhone-heavy Smart Consumer Electronics division.
Strategic Partnerships and Geographic Expansion
Foxconn is not only scaling up AI servers but also innovating in specialized ASIC variants for cloud providers. Its partnerships with Nvidia and other chip leaders underscore its central role in building the backbone of the AI era.
To hedge against geopolitical and tariff risks, Foxconn is aggressively diversifying its manufacturing footprint. While Mexico remains a hub, the company is expanding AI server production across the United States with operations in Texas, Wisconsin, and planned facilities in California and Ohio. This shift reflects a strategy to stay close to North American hyperscalers who are leading the AI infrastructure build-out.
Beyond AI: Diversification Into the Future
Although AI servers are the headline, Foxconn’s long-term strategy spans multiple industries:
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Electric Vehicles (EVs): The company is investing heavily in EV manufacturing platforms to serve automakers seeking modular, cost-effective production.
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Semiconductors: Foxconn is ramping up chip design and fabrication capacity to reduce reliance on external suppliers.
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Healthcare Robotics: Robotics and automation in healthcare present another high-growth vertical for the company.
Still, the AI server boom is the defining pivot. It positions Foxconn not just as a contract manufacturer but as a key architect of the digital infrastructure powering machine learning, generative AI, and next-gen robotics.
The End of an Era, the Start of Another
For Apple, Foxconn remains a crucial partner but no longer the primary growth engine. The smartphone era that defined the last 15 years of consumer tech is giving way to an AI-first future, and Foxconn has moved decisively to align itself with the new paradigm.
In short, the message for investors and industry watchers is clear:
📌 Foxconn is no longer just Apple’s factory floor. It’s becoming one of the core manufacturers of the AI age.
