Foxconn is moving past the iPhone with a Mexico mega-factory helping to make Nvidia chips

Foxconn and Apple’s fates have been intertwined over the past decade, as the Taiwanese electronics assembler churned out iPhones and iPads for customers around the world.

But now, the world’s largest contract manufacturer is being recognized for more than just the iPhone.

In August, the world’s largest contract manufacturer reported that quarterly profits rose 6% year-on-year to reach 35 billion New Taiwan dollars ($1.1 billion). Revenue also rose to 1.55 trillion New Taiwan dollars ($48.1 billion).

The reason? Foxconn’s business making AI servers.

The past year has been “all about artificial intelligence,” Foxconn chairman Young Liu said in a pre-recorded opening speech before he went on stage at the company’s annual Tech Day, on Oct. 8 in Taipei.

That same day, Foxconn revealed it was making the world’s largest production facility for the GB200, a key component of Nvidia’s next-generation Blackwell computing platform.

“Everyone is asking for Blackwell. The demand is awfully huge,” Benjamin Ting, Foxconn’s senior vice president for cloud enterprise solutions, told the Tech Day audience on Tuesday.

Liu later told reporters the new Foxconn plant was planned to be built in Mexico.

Right place, right time

Foxconn controls about 40% of global market share for servers and its jump in AI revenue could be a case of “right place, right time,” Kirk Yang, chairman of Kirkland Capital and longtime Foxconn watcher, says. The company could leverage both “years of server experience” and a close relationship working with Nvidia.

Yet Yang thinks another of Foxconn’s recent business ventures is a better bet for the company: electric cars.

Foxconn, which has been in the EV business since 2019, officially unveiled two more EV prototypes this week. First is the Model D, a multipurpose utility vehicle, and the Model U, a “midi-sized” electric bus.

Much like it does with consumer electronics, Foxconn plans to manufacture electric vehicles for existing car brands.

Foxconn’s EVs have yet to gain major traction in international markets, only winning corporate customers in its home base of Taiwan, and Yang warns it can take years to break into the auto supply chain.

Yet the company’s model of making goods for other brands may soon appeal to some overseas markets.

“If we check the revenue for the new markets, EVs are still very promising,” says Helen Chiang, who leads Asia semiconductor research, including automobile chips, for the market intelligence firm IDC.

Car companies outside of China, like those in Japan, have been slower to transition to EVs and they might be attracted to Foxconn’s offer of a ready-made, customizable model. Chiang said the growth in the EV market has slowed and some mainstream auto brands have slowed research and development for EVs, and she thinks it may be helpful for those companies to work with Foxconn and leverage the Taiwanese firm’s strength in manufacturing and cost.

Foxconn’s EV division already has a Japan connection. Its chief strategy officer for EVs, Jun Seki, spent over three decades at Nissan and two years at Japanese electric motor manufacturer Nidec before moving to Foxconn in early 2023. Seki told Nikkei Asia Foxconn expects to sign manufacturing agreements with two Japanese automakers by the end of this year.

Foxconn could also find success with commercial vehicles, rather than personal passenger cars. Chinese EVs could end up dominating the market for the latter, as fierce price competition at home leads to more affordable models overseas.

“China players’ focus is still on the consumer right now,” Chiang says.

This story was originally featured on Fortune.com