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Trump tariffs are proving ‘big headache’ for tech giants, says Foxconn
The Tycoon Herald > Economy > Trump tariffs are proving ‘big headache’ for tech giants, says Foxconn
Economy

Trump tariffs are proving ‘big headache’ for tech giants, says Foxconn

Tycoon Herald
By Tycoon Herald 4 Min Read Published March 14, 2025
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The US authorities’s tariff bulletins have turn into a “big headache” for know-how firms comparable to iPhone maker Apple and cloud service supplier Amazon, their manufacturing accomplice Foxconn mentioned on Friday, in a uncommon public admission of the disruption attributable to President Donald Trump’s erratic commerce coverage.

“The issue of tariffs is something that is giving the CEOs of our customers a big headache now,” chief government Younger Liu instructed traders on an earnings name. “Judging by the attitude and the approach we see the US government taking towards tariffs, it is very, very hard to predict how things will develop over the next year. So we can only concentrate on doing well what we can control.”

Liu mentioned the corporate’s prospects had been “one after another” hatching plans for co-operating with Foxconn on manufacturing within the US. He declined to provide particulars as these plans weren’t but finalised, however mentioned there ought to be “more and more” manufacturing within the US.

The world’s largest contract electronics producer assembles the overwhelming majority of the world’s iPhones for Apple and in addition makes a broad vary of different electronics merchandise, together with laptops, servers, robots, medical gear and electrical autos.

Foxconn itself is affected by Washington’s makes an attempt to power extra manufacturing to maneuver onshore. The lion’s share of its manufacturing capability is in China — lately hit by an extra 10 per cent US tariff — India and Vietnam, that are each doubtless targets for Trump’s deliberate reciprocal tariffs. Foxconn can also be constructing what it mentioned final October could be the world’s largest manufacturing facility for Nvidia Blackwell servers in Mexico, the place Trump has slapped a 25 per cent tariff on its exports to the US.

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Trump tariffs are proving ‘big headache’ for tech giants, says Foxconn

Foxconn forecast its data and communication merchandise enterprise, dominated by its contract work for Apple, could be steady this 12 months. “But under the uncertainties related to geopolitics and tariffs, manufacturing will face challenges and demand might also suffer,” Liu mentioned, including that the corporate would work carefully with prospects to regulate its world footprint.  

However the Taiwanese group gave a bullish outlook for AI servers. The corporate’s server meeting income elevated 78 per cent within the fourth quarter of 2024 in contrast with the identical interval a 12 months earlier, and it mentioned it anticipated the AI server enterprise to greater than double within the present quarter.

Liu mentioned he didn’t share considerations that cloud service suppliers would possibly reduce spending this 12 months. He mentioned the success of Chinese language AI firm DeepSeek in creating a big language mannequin with smaller {hardware} funding was more likely to encourage bigger numbers of medium-sized firms to develop their very own LLMs, additional boosting server demand.

Pushed by that robust progress, cloud and networking merchandise would account for half the corporate’s income this 12 months, overtaking the patron electronics enterprise, which has lengthy weighed on Foxconn’s margins with its low-margin smartphone meeting operations.

Foxconn reported a shock 13 per cent year-on-year drop in internet revenue for the fourth quarter. Web earnings slid to NT$46.3bn (US$1.4bn) within the three months to the tip of December, however the lower was resulting from a drop in non-operating revenue, whereas working revenue elevated by 32 per cent.

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