By Yang Jie and Kosaku Narioka

Contract manufacturer Foxconn Technology Group reported a 33% rise in fourth-quarter net profit and forecast significant growth this year, boosted by investments in artificial intelligence.

Foxconn, whose clients include Apple, Sony and other technology companies, had earlier provided a cautious outlook for 2024, but it said Thursday the AI boom would enable significant growth. Foxconn makes servers and other devices used in AI applications.

Young Liu, the company's chairman, said industry-wide demand for graphics-processing modules often used in AI applications would more than double this year. Industry-wide revenue from AI servers is expected to rise 40% this year, and AI servers are expected to account for more than 40% of Foxconn's overall server revenue, he said.

Foxconn, formally known as Hon Hai Precision Industry, said net profit in the final quarter of 2023 rose to about 53 billion New Taiwan dollars (US$1.68 billion), beating analysts' estimates.

It said revenue in the quarter fell 5.7%, owing to lackluster demand for cloud and networking products and a slowing personal-computer market. Its operating profit margin improved slightly over the same period in 2022, when Covid-19 outbreaks affected some operations in China.

The company said it expected business at its consumer-electronics segment to be largely flat this year compared to 2023.

Liu said companies are increasingly integrating AI into personal computers and smartphones and predicted that "killer apps" for AI are likely to surface soon. He discussed potential applications, such as an AI-powered karaoke app that could call up a song based on hummed tunes.

Liu said he would attend a Nvidia conference next week in the U.S. Foxconn said in October it would expand its partnership with Nvidia to develop a new class of data centers that can power AI services.

Liu said Foxconn has built up its abilities in AI devices and is strong in technologies needed to build AI data centers such as power-supply components and cooling systems.

Foxconn has been taking steps in recent years to diversify its lines of businesses to include electric vehicles and AI. It is expanding production in countries like India to reduce concentration in China. Foxconn said it started delivering its Model C electric vehicles to customers this quarter.

Write to Yang Jie at and Kosaku Narioka at

(END) Dow Jones Newswires

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