Foxconn will invest between $2 billion and $3 billion annually in artificial intelligence over the next several years, Chairman Young Liu told Reuters, underscoring the company’s shift toward next-generation technologies as growth in consumer electronics slows.
Liu spoke during a visit to Tokyo earlier this month, with his comments embargoed until Friday to align with the Apple supplier’s annual Hon Hai Tech Day. “For now, AI will be the majority of the investment,” he said, adding that spending on AI infrastructure and technology development over the next three to five years will account for more than half of Foxconn’s roughly $5 billion in yearly capital expenditure.
Foxconn’s cloud and networking division — which includes AI servers — has surpassed consumer electronics revenue for two consecutive quarters, highlighting the pace at which the Taiwanese manufacturer’s business mix is evolving. Liu, who has led the world’s largest contract electronics maker since 2019, said China’s crowded electric-vehicle sector faces “very fierce competition” and predicted consolidation as weaker players struggle.
“They’re not making money,” he said, noting that government support was too limited to sustain every EV company in the world’s biggest auto market. He said China’s automotive landscape will be “much more stable” after a shakeout.
Pressure on China’s EV market is already visible. Industry leader BYD last month reported its steepest quarterly profit decline in more than four years and has since cut its 2025 sales target to 4.6 million vehicles amid rising competition from domestic rivals. Foxconn itself delayed its goal of capturing 5% of the global EV market by 2025, citing slowing EV demand worldwide.
Liu said Foxconn remains committed to EVs but is pausing major investment until market conditions improve, while exploring future opportunities in areas such as quantum computing and robotics. He added that the company is in discussions with the Japanese government about potential investments in EVs or AI, without providing details.
Local manufacturing of AI systems, he said, is vital for data sovereignty. Drawing a parallel to the early personal-computer industry, Liu said intensifying competition will eventually push automakers toward outsourcing production. “Once they start outsourcing with one successful example, the others will follow,” he said. “That’s exactly what we saw in the PC market.”