For more than a decade, Foxconn has been synonymous with Apple’s iPhone production, making the Taiwanese manufacturer a global giant in consumer electronics. However, the landscape is changing. With slowing smartphone demand and intensifying competition in contract manufacturing, Foxconn is redirecting its focus towards artificial intelligence (AI) servers, a sector rapidly becoming the new backbone of Taiwan’s technology industry.

Decline of Apple-Driven Growth

Once considered the crown jewel of Foxconn’s revenue stream, Apple’s iPhone orders have plateaued in recent years. Market saturation in developed regions, longer consumer upgrade cycles, and rising competition from Chinese manufacturers have weakened Apple’s growth momentum. This decline has directly impacted Foxconn, which derived a significant share of its earnings from assembling iPhones and other Apple devices.

AI Servers: The New Growth Catalyst

Foxconn is now pivoting to capitalize on the global surge in demand for AI-driven data centers. The company is expanding its production of high-performance servers, designed to support advanced machine learning models, cloud computing, and enterprise AI applications. These servers, packed with powerful chips from Nvidia, AMD, and Intel, are reshaping Foxconn’s revenue profile, signaling a broader shift in Taiwan’s technology ecosystem.

Taiwan Tech Sector Riding the AI Wave

Foxconn is not alone. Taiwan’s broader tech industry — including chipmakers like TSMC and hardware suppliers across the supply chain — is experiencing a growth boom fueled by AI. As global firms race to build infrastructure for artificial intelligence, Taiwanese companies are emerging as key suppliers of both advanced semiconductors and hardware systems. This transition highlights how Taiwan is evolving from being just a smartphone and consumer electronics hub to a vital player in the AI revolution.

Balancing the Future

While Apple remains an important partner, Foxconn’s diversification into AI infrastructure demonstrates its long-term strategy to reduce reliance on a single client. Industry experts believe this pivot could shield the company from cyclical downturns in consumer electronics and secure its position as a global leader in next-generation technology manufacturing.