Foxconn Capital Expenditure to Increase by 30% This Year; Previous Investments Gradually Reflecting in Operational Results

Foxconn (2317-TW) held its earnings briefing today (12th). CFO Louis Wang stated that due to sustained strong demand for AI servers, the company's full-year capital expenditure in 2025 is expected to increase by over 30% year-on-year. In terms of return on investment, earlier capital outlays are gradually reflecting in operational results. Both operating profit and EBITDA are growing at a faster pace than revenue, indicating that capital investments are progressively driving economies of scale and enhancing profitability.

Louis Wang noted that Foxconn's capital expenditure in 2024 was approximately NT$136.3 billion, an increase of NT$24.6 billion from the previous year, and is projected to rise further to around NT$173.8 billion in 2025—an increase of NT$37.4 billion. The company's operating profit reached NT$259.2 billion in 2024, up NT$58.6 billion year-on-year, while in the first half of 2025, operating profit reached NT$170.5 billion, up NT$67.4 billion year-on-year. The growth in operating profit has clearly outpaced revenue growth, demonstrating that past capital investments are now translating into greater scale efficiency and improved profitability.

In terms of cash generation capability, the return on capital expenditure is also becoming increasingly evident. Foxconn's EBITDA for 2025 is estimated at approximately NT$357 billion, up NT$68.5 billion year-on-year, while EBITDA in the first half of 2025 reached NT$227.7 billion, up NT$77.6 billion year-on-year—an increase exceeding the growth rate of capital expenditure. This reflects a continuous improvement in the core business's ability to generate cash.

Louis Wang stated that capital expenditure continues to rise due to growth in AI-related businesses, expansion of global manufacturing footprint, and increasing demand for automation. Capital expenditure in the first half of 2025 was approximately NT$80.9 billion, up NT$3.7 billion year-on-year, with full-year expenditure expected to grow over 30% year-on-year. Key investment areas include critical production capacities for AI server racks, liquid cooling, and testing, as well as global manufacturing and automation infrastructure.

Regarding global production expansion, Foxconn will continue to increase capacity in Taiwan, the United States, Mexico, and Vietnam. In response to U.S. customers' localization demands, the company is expanding R&D and manufacturing capabilities in Texas, Wisconsin, Ohio, and California. Foxconn's global footprint currently spans 24 countries with over 240 sites.