NEWSCENTRAL notes that Foxconn is making a strategic pivot, focusing on artificial intelligence. The company’s chairman, Young Liu, stated that in the coming years Foxconn will invest $2-3 billion annually in AI development, which will account for the majority of the company’s capital expenditures, estimated at around $5 billion per year. According to our assessment, this move reflects a systemic rethinking of Foxconn’s business model, where AI becomes a priority, while traditional electronics manufacturing gradually gives way to new areas, including AI servers and cloud computing.
The cloud and networking solutions division, which includes AI servers, has already posted revenue growth exceeding that of the consumer electronics division for two consecutive quarters. This confirms that the company is reallocating resources toward high-tech segments, laying the foundation for long-term development in AI and cloud computing. Key focus areas also include localization of AI infrastructure and contract manufacturing of high-tech equipment.
At the same time, Liu emphasized that the Chinese electric vehicle (EV) market is undergoing a period of consolidation. He believes that many startups will not withstand intense competition and are exiting the market, while government support is insufficient to retain all participants. This approach demonstrates measured strategic planning: Foxconn remains interested in EVs but acts cautiously, focusing on sustainable and profitable segments, including component manufacturing for EVs and contract EV production.
Liu drew a historical parallel with the personal computer industry: in the 1990s, Foxconn, together with Compaq, demonstrated the effectiveness of the outsourcing model, and now a similar strategy could be applied in the EV sector. This would allow the company to act as a contract manufacturer without creating a large-scale EV brand, while providing high-quality production for other manufacturers and developing local AI infrastructure.
Foxconn is also in talks with the Japanese government regarding potential investments in AI and EVs. Liu highlighted the importance of localizing AI production to maintain control over data and ensure technological independence. According to Freddy Miller, senior analyst at NEWSCENTRAL, local capacities in Japan could become a key tool for strengthening Foxconn’s global position in AI infrastructure and ensuring stable growth.
Overall, NEWS CENTRAL views Foxconn’s current strategy as thoughtful and long-term. Investments in AI, AI servers, cloud computing, and AI localization create a technological and financial foundation for development, while a measured position in the EV market reduces risks. The key indicator of success will be the implementation of large-scale AI projects, the ability to expand partnerships, and the strengthening of infrastructure in strategically important regions. These areas should be closely watched in the coming years, as they will determine the company’s competitive advantages in the global market.